^y 


m 


^ 


/2 


^} 


IMAGE  EVALUATION 
TEST  TARGET  (MT-S) 


1.0 


1^ 


I.I 


150 


2.5 
2.2 


2.0 


LB 


1-25      1.4   1  1.6 

=^=     =  II  -=s 

« 

^ 6"  

». 

Photographic 

Sciences 
Corporation 


23  WEST  MAIN  STREET 

WEBSTER,  N.Y.  14580 

(716)  872-4503 


CIHM/ICMH 

Microfiche 

Series. 


CIHM/ICMH 
Collection  de 
microfiches. 


Canadian  Institute  for  Historical  Microreproductions  /  Institut  Canadian  de  microreproductions  historiques 


Technical  and  Bibliographic  Notes/Notes  techniques  et  bibliographiques 


The  Institute  has  attempted  to  obtain  the  best 
original  copy  available  for  filming.  Features  of  this 
copy  which  may  be  bibliographically  unique, 
which  may  alter  any  of  the  images  in  the 
reproduction,  or  which  may  significantly  change 
the  usual  method  of  filming,  are  checked  below. 


D 
D 
D 
D 
D 
D 
D 
D 


D 


D 


Coloured  covers/ 
Couverture  de  couleur 

Covers  damaged/ 
Couverture  endommagde 

Covers  restored  and/or  laminated/ 
Couverture  restaur6e  et/ou  pellicuida 

Cover  title  missing/ 

Le  titre  de  couverture  manque 

Coloured  maps/ 

Cartes  g6ographiques  en  couleur 

Coloured  ink  (i.e.  other  than  blue  or  black)/ 
Encre  de  couleur  (i.e.  autre  que  bleue  ou  noire) 

Coloured  plates  and/or  illustrations/ 
Planches  et/ou  illustrations  en  couleur 

Bound  with  other  material/ 
Reli6  avec  d'autres  documents 

Tight  binding  may  cause  shadows  or  distortion 
along  interior  margin/ 

La  re  Mure  serr^e  peut  causer  de  I'ombre  ou  de  la 
distortion  le  long  de  la  marge  intdrieure 

Blank  leaves  added  during  restoration  may 
appear  within  the  text.  Whenever  possible,  these 
have  been  omitted  from  filming/ 
II  se  peut  que  certaines  pages  blanches  ajoutdes 
lors  d''  ne  restau ration  apparaissent  dans  le  texte, 
mais,  lorsque  cela  6tait  possible,  ces  pages  n'ont 
pas  6t6  film^es. 

Additional  comments:/ 
Commentaires  suppl6mentairas: 


L'Institut  a  microfilm^  le  meilleur  exemplaire 
qu'il  lui  a  dt6  possible  de  se  procurer.  Les  details 
de  cet  exemplaire  qui  sont  peut-§tre  uniques  du 
point  de  vue  bibliographique,  qui  peuvent  modifier 
ure  image  reproduite,  ou  qui  peuvent  exiger  une 
modification  dans  la  mdthode  normale  de  filmage 
sont  indiquds  ci-dessous. 


D 
D 
D 
D 
D 
D 


D 
D 


Coloured  pages/ 
Pages  de  couleur 

Pages  damaged/ 
Pages  endommagdes 

Pages  restored  and/or  laminated/ 
Pages  restaur^es  et/ou  pelliculdes 

Pagos  discoloured,  stained  or  foxed/ 
Pages  ddcolordes,  tachetdes  ou  piqudes 

Pages  detached/ 
Pages  d6tach6es 

Showthrough/ 
Transparence 


I      I    Quality  of  print  varies/ 


Qualitd  in^gale  de  I'impression 

Includes  supplementary  material/ 
Comprend  du  materiel  supplementaire 


Only  edition  available/ 
Seule  Edition  disponible 

Pages  wholly  or  partially  obscured  by  errata 
slips,  tissues,  etc.,  have  been  refilmed  to 
ensure  the  best  possible  image/ 
Les  pages  totalement  ou  partieliement 
obscurcies  par  un  feuillet  d'errata,  une  pelure, 
etc.,  ont  6t6  filmdes  k  nouveau  de  fapon  d 
obtenir  la  meilleure  image  possible. 


This  item  is  filmed  at  the  reduction  ratio  checked  below/ 


10X 

pcum 

sni  a 

SC   III 

mo  a 
14X 

u  lau 

X  a« 

rouu 

UllUll 

18X 

IIIUIl 

4U«   \t 

i-uoa 

BUUB 

22X 

26X 

30X 

^ 

12X 

16X 

20X 

1 

24X 

28X 

32X 

■ 

aMiiaiTriMliffliai»frri«<itiifr«tf'-*^-^ 


I 


tails 
du 

}difier 
une 
Tiage 


rrata 
to 


pel  u  re. 


D 

32X 


The  copy  filmed  here  has  been  reproduced  thanks 
to  the  generosity  of: 

Library  of  Congress 
Photoduplication  Service 

The  Images  appearing  here  are  the  best  quality 
possible  considering  the  condition  and  legibility 
of  the  original  copy  and  in  keeping  with  the 
filming  contract  specifications. 


Original  copies  In  printed  paper  covers  are  filmed 
beginning  with  the  front  cover  and  ending  on 
the  last  page  with  a  printed  or  illustrated  Impres- 
sion, or  the  back  cover  when  appropriate.  All 
other  original  copies  are  filmed  beginning  on  the 
first  page  with  a  printed  or  illustrated  impres- 
sion, and  ending  on  the  last  page  with  a  printed 
or  illustrated  Impression. 


The  last  recorded  frame  on  each  microfiche 
shall  contain  the  symbol  —^►(meaning  "CON- 
TINUED"), or  the  symbol  V  (meaning  "END"), 
whichever  applies. 

Maps,  plates,  charts,  etc.,  may  be  filmed  at 
ii.i  rerent  reduction  ratios.  Those  too  large  to  be 
entirely  Included  in  one  exposure  are  filmed 
beginning  in  the  upper  left  hand  corner,  left  to 
right  and  top  to  bottom,  as  many  frames  as 
required.  The  following  diagrams  illustrate  the 
method: 


1 

2 

3 

L'exemplaire  film6  fut  reproduit  grdce  d  la 
g6n6rosit6  de: 

Library  of  Congress 
Photoduplication  Service 

Les  Images  suivantes  ont  6X6  reproduites  avec  le 
plus  grand  soin,  compte  tenu  de  la  condition  et 
de  la  nettetd  de  l'exemplaire  film6,  et  en 
conformity  avec  les  conditions  du  contrat  de 
filmage. 

Les  exemplaires  originaux  dont  la  couverture  en 
papier  est  imprimis  sont  filmds  en  commenqant 
par  le  premier  plat  et  en  terminant  soit  par  la 
dernldre  page  qui  comporte  une  empreinte 
d'impression  ou  d'illustration,  soit  par  le  second 
plat,  selon  le  cas.  Tous  les  autres  exemplaires 
originaux  sont  film6s  en  commenpant  par  la 
premidre  page  qui  comporte  une  empreinte 
d'impression  ou  d'illustration  et  en  terminant  par 
la  dernidre  page  qui  comporte  une  telle 
empreinte. 

Un  des  symboles  suivants  apparaitra  sur  la 
dernidre  image  de  cheque  microfiche,  selon  le 
cas:  le  symbols  — ►  signifie  "A  SUIVRE  ",  le 
symbols  V  signifie  "FIN". 

Les  cartes,  planches,  tableaux,  etc.,  peuvent  dtre 
fllm6s  d  des  taux  de  reduction  diffdrents. 
Lorsque  le  document  est  trop  grand  pour  dtr? 
reproduit  en  un  seul  cliche,  11  est  film6  d  partir 
de  Tangle  sup6rieur  gauche,  de  gauche  d  droite, 
et  de  haut  en  bas,  en  prenant  le  nombre 
d'images  n6cessaire.  Les  diagrammes  suivants 
lllustrent  la  mdthode. 


1 

::  $ 

3 

4 

3 

6 

L 


V 


A  PLEA 


FOB 


UNCLE  SAM-'S  MONEY; 


OR, 


1    ■ 

Ijrccnkck 


tmm 


atth  %:k% 


BY 

HUGH   BOWLBY   WILLSON. 


New  York,  March,  1870- 


gew  lark : 

JOHN  MEDOLE,  BOOK  AND  JOB  PRINTER, 

193     HSAHL     STKEET. 

1870. 


•^o^„ 


[ 


1 

\ 


I    i 
1^ 


,i 


— ,_^. ,  .,«^,-_,  .  p^ 


,* 


a. 


To  General  U.  S.  Grant, 

President  of  the  United  States. 

Sir  :  I  take  the  liberty  of  addressing  the  following  pages,  con- 
taining arguments  deduced  from  scientific  principles,  in  favor  of 
maintaining  and  perpetuating  the  national  currency,  to  you,  as  the 
truest  representative  of  the  popular  will  and  sentiment. 

The  honest  and  efficient  administration  of  the  public  finances,  by 
your  able  Secretary,  Mr.  Boutwell,  and  the  strict  enforcement  of 
economy  in  all  branches  of  the  public  service,  since  your  advent  to 
power,  have  strengthened  the  public  conviction  that  the  nation  has 
placed  "  the  right  man  in  the  right  place." 

During  the  first  year  of  your  administration  wo  have  witnessed 
a  reduction  of  our  national  debt  of  $100,000,000,  without  any  addi- 
tion to  the  burthens  of  the  people.  We  have  in  that  time  seen  the 
national  securities  rapidly  appreciate,  and  the  national  currency 
rise  from  76  to  about  90.  The  disjointed  elements  of  the  Union 
have  been  nearly  restored,  and  the  public  confidence  in  the  stability 
of  the  Government  fully  established. 

All  that  is  now  needed  is  the  cordial  support  of  the  legislature, 
during  the  remainder  of  your  term  of  office,  to  effect  a  great  reduc- 
tion of  the  public  burthens  by  a  wise  measure  for  funding  the  na- 
tional debt.  We  should  have  at  least  two  years  more  of  the  same 
rigid  economy  and  honest  enforcement  of  the  revenue  laws,  before 
devising  a  law  for  funding  the  debt.  By  that  time  our  currency 
will  be  firmly  settled  on  a  specie  basis,  and  the  public  creditors,  at 
home  and  abroad,  will  be  glad  to  accept  a  much  lower  rate  of  in- 
terest. The  funding  bill  now  before  Congress,  if  passed  in  its  pres- 
ent form,  will,  in  my  judgment,  prove  abortive,  like  so  many  similar 
measures  prematurely  attempted  in  England. 
I  am. 
With  great  respect. 

Your  very  obed't  servant, 

H.  B.  WILLSON. 

85  LiBXBTT  Stbebt,  Nbw  Yobk. 


/ 


1 


•  41 


/ 


i^ 


^ 


1-  ,": . 
A"    * 


>>(•-*  -'f 


t>y  transter  from 

xSlational  Monetary  Ooninlaalon, 

1012 


L  .  ■       '         -.     %«^|^^fi|-  ■ 


A  PLEA  FOR  UNCLE  SAM'S  MONEY; 


Ml. 


GREENBACKS  vs.  BANK   NOTES. 


q 


The  Cubuexcy — The  most  Important  Question  before  the 

People. 

(From  the  Xew  Yoik  HeraW,  10th  Dec,  1800.) 

Now  that  the  question  of  rcconstructinp;  the  nation  on  a  durable 
basis  draws  near  its  solution,  one  of  no  less  importance  to  the 
present  and  future  welfare  of  the  country  presents  itself  for  prompt 
and  earnest  consideration.  That  question  is,  how  to  deal  with  our 
paper  currency.  This  description  of  currency  is  the  creature,  and 
has  now  become  the  necessity,  of  modern  civilization.  Civilized 
society  can  no  more  do  without  a  paper  currency  than  it  can  dis- 
pense with  the  steam  engine,  the  railway  or  the  electric  telegraph. 
The  principles  and  uses  of  these  have  been  wrought  out  by  the 
patient  labor  and  research  of  men  of  exalted  genius ;  but  paper 
money  has  been  the  motive-power  that  has  set  all  the  vast  ma- 
chinery involved  in  operation.  Hen^r  every  man  who  has  studied 
the  subject  from  a  scientific  as  well  as  ;•  i  ractical  point  of  view,  will 
admit  it  is  one  of  lirst-class  national  importance,  and  as  such  de- 
manding the  most  careful  and  dispassionate  investigation  by  our 
national  legislators. 

The  wisdom  of  retaining  our  national  currency,  and  of  retiring  or 
canceling  the  national  bank  currency,  is  every  day  being  recognized 
by  all  classes  of  the  community,  except  those  interested  in  the  na- 
tional banks  themselves.  General  Garfield,  the  chairman  of  the 
House  Committee  on  Banking  and  Currency,  to  which  this  ques- 
tion is  properly  referable,  has  candidly  confessed  his  conversion, 
since  last  session,  to  the  views  long  and  uniformly  advocated  by 
this  journal.    The  argument  used  by  those  who  favor  the  retire- 


f 

i 

\ 
I 

s 


miLiUiim- 


mcnt  of  our  national  circulation,  and  the  substitution  of  national 
bank  notes  tliorefor,  in  that  the  former  was  a  war  measure,  forced 
on  the  country  by  necessity,  and  ought  to  bo  dispensed  with  as  soon 
as  i)08siblo.  Senator  Sumner  and,  it  is  said,  Chief-Justice  Chase 
and  many  other  distinguished  statesmen  take  this  position;  but  none 
of  this  class  of  opponents  have  offered  a  single  sound  reason  in  suj)- 
port  of  this  assumption,  which  stands  as  a  mere  brutumfulmen — a 
simjjle,  unsupported  declaration.  On  the  other  hand,  the  most  pow- 
erful and  unanswerable  reasons  have  been  urged  in  favor  of  the  op- 
posite policy.  As  the  question  will  probably  engage  the  early 
attention  of  Congress,  we  propose  to  consider  it  in  all  its  bearings, 
and  to  lay  before  our  readers  such  a  summary  of  the  origin,  uses 
and  development  of  paper  currency,  and  of  the  principles  which  gov- 
ern it,  as  will  convince  every  candid  and  unbiased  man  in  the  coun- 
try that  the  views  we  have  contended  for  arc  right. 

Before  entering  into  the  merits  of  so  great  a  question,  wo  will 
dispose  of  the  unmeaning  assertion  that  the  national  currency  should 
be  retired  because  it  was  the  creature  of  necessity,  at  a  time  when 
the  nation  was  involved  in  a  life  and  death  struggle.  Now,  it  by 
no  means  follows  that  a  measure  adopted  in  time  of  war,  and 
justified  on  the  gi'ounds  of  necessity,  may  not  be  good  and  highly 
beneficial  in  time  of  peace.  Necessity  is  said  to  bo  the  mother  of 
invention,  and  whether  the  necessity  originate  in  the  exigencies  of 
war  or  in  "piping  times  of  peace"  the  merits  of  her  progeny  must 
be  weighed  by  the  same  standard  and  tested  by  the  same  rules  of 
evidence. 

What  is  meant  by  the  Science  of  Money. 

It  is  only  since  the  commencement  of  the  present  century  that 
banking  and  currency  (embracing  the  uses  and  circulation  of  money 
and  paper  currency)  have  been  treated  as  a  science — that  is,  as  being 
governed  by  certain  determinate  principles,  deducible  from  known 
and  uniform  results.  Like  all  inductive  sciences,  it  is  founded  on 
the  practical  experience  of  mankind.  That  is,  when  we  iind  that 
history  establishes  the  fact  that  certain  eflfeets  invariably  follow  cer- 
tain causes,  or  a  certain  definite  policy,  with  as  much  exactness  asthc 
demonstrations  of  the  so-called  "exact  sciences,"  or  mathematics,  we 
claim  this  as  a  scientific  solution  of  the  questions  involved.    Though 


i 


't^i^^'vs'J'iuktJi'r^kxi^'k 


ution  of  national 
,r  measure,  forced 
nscd  Avith  as  soon 
licf-Justicc  Chase 
position;  but  none 
md  reason  in  sup- 
irutumfiilinen — a 
nd,  tliemost  pow- 
n  favor  of  the  op- 
engage  tlie  early 
II  all  its  bearings, 
if  the  origin,  uses 
ciplcs  which  gov- 
man  in  the  coun- 
,t. 

question,  wo  will 
d  currency  should 
y,  at  a  time  when 
fglc.  Now,  it  by 
imo  of  war,  and 
good  and  highly 
bo  the  mother  of 
the  exigencies  of 
er  progeny  must 
the  same  rules  of 


VIONEY. 

sent  century  that 
iulation  of  money 
-that  is,  as  being 
iible  from  known 
,  it  is  founded  on 
hen  we  find  that 
riably  follow  cer- 
h  exactness  as  the 
mathematics,  we 
volved.    Though 


much  has  been  done  since  the  days  of  Adam  Smitli  to  evolve  a  reg- 
ular and  flciontific  solution  of  the  money  question,  it  must  still  in 
many  respects  bo  regarded  an  wanting  in  system  and  as  being  in  its 
infancy.  Great  Britain  and  France  have  produced  many  able  and 
some  very  demonstrative  writers  on  money  and  currency,  consider- 
ed according  to  scientiflo  principles.  In  this  respect  we  have  but 
little  to  boast  of,  but  it  is  hardly  possible  that  the  prominence  which 
this  subject  has  assumed  in  this  country  will  not  wipe  out  this  re- 
proach. The  great  desideratum  of  the  present  time  is  a  concise  and 
demonstrative  treatise  on  banking  and  currency,  showing  the  neces- 
sity of  maintaining  a  national  currency  and  none  other.  Although 
the  columns  of  a  daily  Journal  do  not  permit  of  treating  the  subject 
in  any  other  tiian  a  brief  and  popular  manner,  wo  hope  to  bo  able 
to  point  out  a  solution,  at  once  feasible  and  practical,  of  the  ques- 
tion as  it  presents  itself  for  consideration  at  the  present  time. 

The  Origin  of  Pai'eu  Currency. 

Wo  shall  comntence  with  a  brief  statement  of  the  origin  of  paper 
currency,  which,  wo  have  said,  has  been  the  creature  and  has  become 
the  necessity  of  modern  civilization.  It  will  bo  seen  that  the  issue 
and  circulation  of  promissory  notes,  payable  at  short  dates  or  on 
demand,  by  banks,  instead  of  by  governments  or  nations,  was  purely 
accidental,  and  the  circumstance  affords  no  argument  in  favor  of  con- 
tinuing the  system,  if  a  better  one  has  been  discovered  or  can  be 
proved  to  exist. 

Up  to  the  thirteenth  century  merchants  were  compelled  to  trans- 
mit, at  great  risk  and  cost,  all  their  remittances  from  one  country 
to  another,  and  from  one  part  of  their  own  country  to  another,  in 
gold  or  silver  coin  or  bullion,  in  order  to  maintain  the  balances 
of  trade.  This  circumstance  of  itself,  at  a  period  when  expresses 
were  unknown,  and  when  neither  the  public  conveyances  by  sea  nor 
by  land  were  free  from  danger,  would  necessarily  limit  the  growth 
of  trade— especially  between  distant  countries.  At  length,  early  in 
the  century  just  named,  the  Lombard  merchants— a  class  of  shrewd 
money  dealers— invented  what  were  termed  "money  dealers'  letters," 
which  were,  in  fact,  bills  of  exchange,  A  small  sum  was  added  to 
the  amount  demanded  for  these  bills,  to  cover  risk  of  transferrenco 
of  balances  from  place  to  place  in  coin,  which  these  dealers  could 


I! 


~l.(ui^'i 


olTont  chonpor  timi,  ordinary  ino.clmnt.  and  travelers.  Thcso 
a  "ri..T'n  ^'■'""^.  '^••*">""''o.lato,l  by  this  simple  expedient,  and. 
as  tl.  .r  IM  Is  were  transferable  by  indorsement,  they  soon  passed 
f  om  han.l  to  hand,  nn.l  were  at  length  rcccised  as  a  kind  of  cireu- 
latin^  nicdiujii  or  currency. 

nnr?n?  m'"  ""  T''\' '  "'"""'''  ''  ''  ^^^"''  ^"'•''^''^y  "H  the  early 
IZ        T'"TT^'  ''-'"'"'''^''  ^^'''""  ^''^  »'^"'^  of  An.sterdam  was 

Furo r"S-  T", '"'  '''''''  ^"'"^  •"  -•-•'^''-  thr.a.ghout 
we  X  \  T'  ''^'"'"^•"^'"l  !>>'  ••*^«oivM.ff  gold  depo..Us  by 
m  '"^1^7"""?  ••'^^^'■P'^  ^''^'-'-'for.  ".aking  a  B:nan  deduction 
for  the  cost  of  recomago.  The.e  receipts  were  granted  for  six 
monts  payable  to  bearer,  and.  in  consequence  of  the  high  repute 

sta!  tho"  nV  """;'• '"  •"  ^""'■"'  ''"■^"''^*'^"  '^^  '"°"^y-  *>«•"  this 
nS.Io  ,  ^  r"  ''"""^  promissory  notes  of  (ixed  denominations, 
payable  to  bearer  on  demand,  and  the  use  of  checks,  was  an  easy 

JL^^l  ''r  ^°  ^.^«"  *''^^  ^^''i'"  banking  is  claimed  by  eminent 
wr  e.s  to  have  ex.sted  as  early  as  the  time  of  Moses,  the  use  of 
bank  notes  for  money  is  of  very  recent  date.  The  principles  wliich 
govern  a  paper  currency  will  bo  considered  at  another  time,  and 
the  advantages  of  a  solvent  and  opulent  nation's  currency  over  that 
ot  one  or  many  banks  pointed  out. 

Grrat  Importance  of  the  Currency  Question. 

(From  the  Sow  York  Uornld,  ISlh  Doc,  18U9.) 

tl,„y!l"*  ^'''''  PT'^''"^"  *o  ""3  question  is  the  circumstance 
that  the  currency  of  a  country  is  a  permanent,  ever-abiding  neces- 
6ity-a  thing  not  of  months  or  years,  but  for  all  time.    While  in- 
dustry and  commerce  continue  to  exist,  or,  in  other  words,  so  long 
as  the  human  race  shall  inhabit  the  earth  in  its  present  form,  cur- 
rency,  m  some  shape  and  nndcr  some  condition  or  other,  must  bo 
maintained  to  circulate  commodities  and  keep  all  the  complicated 
and  varied  machinery  of  labor  in  motion.    Hence  the  question  of 
funding  the  national  debt,  which  is  only  a  temporary  charge  on  the 
industry  of  the  people,  and  the  readjustment  of  taxation,  which  is 
merely  an  incident  growing  out  of  the  same,  are  matters  which  the 
economist  and  the  legislator  can  only  regard  as  of  secondary  im- 
portancc.  •' 


1 


ravclors.  Tlicso 
lo  expedient,  und, 
they  soon  passed 
3  a  kind  of  circu- 

iicy  till  the  early 
■  Amatcrdam  wa.s 
'8  growing  out  of 
tion  throughout 
;old  depo.dts  by 

8;nall  doductiou 
granted  for  six 

the  high  repute 
ncy.  From  thin 
1  denominations, 
:ks,  was  an  easy 

mod  by  eminent 
loses,  the  uao  of 
principles  Avhich 
other  time,  and 
■rency  over  that 


JESTION. 

0  circumstance 
■-abiding  necos- 
mo.  While  in- 
words,  so  long 
(Sent  form,  cur- 
other,  must  bo 
lie  complicated 
the  question  of 
'  charge  on  the 
ition,  which  is 
ters  which  tho 
secondary  im- 


Thb  Adoi'tiox  op  Hank  instead   op  Govrrnment  NoxEa,  kor 
Currency,  the  Hesuf-t  of  Accident. 

Wo  have  shown  tho  origin  of  paper  currency,  and  that  it  was 
rather  the  result  of  accident  than  of  any  preconceived  theory.  Tho 
"  raonoy-doalors'  letters  "  of  tho  Loiriiiard  merchants,  in  tho  thir- 
teenth century,  were  simply  bills  of  exchange,  similar  to  those  of 
the  present  day,  Miiicli  wo  shall  hereafter  classify  with  tho  various 
kinds  of  currency  recognized  by  modern  political  ecomomiats.  Thoir 
circulation,  howcvor,  was  limited,  and  wo  have  no  evidence  that 
they  were  used  as  money  then  more  than  now.  The  gold  certificates 
of  tho  Bank  of  Amsterdam,  which  were  payable  in  six  months,  did 
take  the  place  of  gold  as  a  circulating  medium.  Now,  it  was  the  acci- 
dental circumstance  of  tho  issuo  of  this  currency  or  "paper  money" 
by  tho  Bank  of  Amsterdain  that  established  the  practice  or  system 
which  has  ever  since  prevailed  of  limiting  tho  issuo  of  promissory 
notes,  payable  on  demand  in  gold  or  silver  bullion  or  coin,  to  banks. 
Had  tho  government  of  Holland  or  of  any  other  opulent  country 
been  the  first  to  issuo  such  certificates  or  demand  notes,  it  is  not 
only  probable,  but  certain,  that  the  usage  would  have  been  confined 
to  tho  national  administratiops,  instead  of  being  turned  over  to  a 
number  of  private  corporations,  or  to  one  great  national  monopoly, 
as  in  England,  Franco  and  other  European  countries.  When  gov- 
ernments havo  resorted  to  tho  practice  of  issuing  paper  pi-omises 
they  havo  in  all  cases  done  so,  not  to  create  a  convenient  circulat- 
ing medium,  or  to  promote  the  ends  of  legitimate  commerce,  but  to 
create  capital  or  resources,  out  of  the  credit  of  tho  nation.  Henco 
such  notes  have  as  invariably  been  irredeemable,  and,  as  a  conse- 
quence,  have  depreciated  ivhen  issued  in  excess  of  the  requirements  of 
commerce. 

The  argument  of  Senator  Sumner  and  other  statesmen,  that  wo 
should  make  haste  to  abolish  our  national  or  government  currency, 
and  substitute  in  its  place  the  paper  of  an  infinite  number  of  banks, 
has  no  better  foundation  than  the  reason  ofiered  by  the  countryman 
who  was  asked  by  his  more  enlightened  neighbor  why  ho  balanced 
his  bag  of  grain  on  his  horse  by  means  of  a  stone  of  equal  weight, 
when  he  might  readily  divide  his  corn  between  the  two  ends, 
and  thus  relieve  his  beast  of  half  his  load.    His  answer,  we  are 


J 


Tiiitifrififii      , 


1 


^■^mHii>ilam'0Mtemb^lkiuJili|ii!^t- 


8 

or  ;  rcten  ion  o?  •"  *?  *''^  «--P«"ments.    Those  who  arguo 

lor  a  1  ctention  of  our  national  currency  and  for  abolishing  our  bank 

ZZVo'IZuof-!'  '"'i  '^'  '''  ^'^P™°*  -  far  fried  as  to 
Trlnl  fW  .  ^f  ^  '"'"'"'^"^   ^'^^"''^^^  «f  th«  ^'^tion   shall 

cnt  .  -f fill       ""^  consequence  what  the  originators  of  our  pres- 

-Ihetnllr' •'r^T!''"P''*'^  ^^^"  *^^y  P"t  it  i°  ^circulation 
-^hetner    hoy  intended  it  as  a  temporary  war  measure  or  as  a 
permanent  institution.    If  it  has  served  a  valuabrpurpose  and 
has  as  we  contend  it  has.  produced  a  large  share  of  tirre  Ices 
of  the  prosperity  which  has  since  enabled  the  country  not  ^nly  to 

wealth  in  a  ratio  never  before  known  in  this  or  any  other  commu- 
nity, or  in  any  age  of  the  world,  then,  we  say,  let  us  not  destrH 
and  go  back  to  the  worst  and  most  precarious  system  of  curr^  y 

The  Object  op  a  Paper  Cubbency  Considebed. 

duftl''f/rr''  t°.'^«'"°n«trate,  by  scientific  reasoning  or  de- 
ducfon   that  the  issuing  of  that  description  of  currency   which 
takes  the  place  of  money,  and  which  we  shall  refer  to  occa  ionaUv 
as  paper  money,  in  contradistinction  to  money,  or  sp  1,  as  woU  ^ 
to  those  other  kinds  of  paper  currency  which  while  thJy  seTve  to 
circulate  commodities,  are  not  received  or  u  ed  as  moTev    hould 
be  confined  exclusively  to  the  nation.    In  order  the  morT'exS' 
obie'of  of -T^'^r^  are  aiming  at.  we  must  briefl'tate  the 
^:^Z:^-'  ''  '''  -'-'^  «^  ^  P'P-  ^or  a 
The  object  and  purpose  of  money,  in  whatever  form,  is  to  circu- 
nTcTatrr^*'  "  ^^""^  '''''''  '^  "  facilitate 'exchng' 

Befl  fhl  J'  'f  ^'°^''  ^^  '^°*^«"°^  '^'^  unnecessary. 

Before  the  invention  of  money  the  commerce  of  the  world  mus 

have  been  carried  on  by  the  rude  process  of  barter  or  by  exchant 

ing  one  kind  of  produce  for  another.     Gold  and  silve   hiving  been 

selected  as  a  common  measure  of  values,  because  of  their  scarcity 


^a^.V^>;mrir'--'  r  ■  ■]    '  ,S^ss^»^^^^^--^-^;^.^-^j^ 


9 


d  dono  so  before 
rhose  who  argue 
)lishing  our  bank 
•  far  tried  as  to 
3wth  of  our  com- 
the  nation  shall 
md  natural  pro- 
tors  of  our  pres- 
;  it  in  circulation 
measure  or  as  a 
)le  purpose  and 
f  the  resources, 
itry  not  only  to 
)p  its  incredible 
y  other  commu- 
3  not  destroy  it, 
}ra  of  currency 
Law  or  of  the 


:debed. 

asoning  or  de- 
irrency,  which 
to  occasionally 
3cie,  as  well  as 

they  serve  to 
money,  should 

more  exactly 
riefly  state  the 
a  paper  for  a 

m,  is  to  circu- 
B  exchanges." 
unnecessary. 
I  world  must 
'by  exchang- 
'  having  been 
their  scarcity 


and  great  value  as  commodities,  at  once  abolished  the  practice  of 
exchanges  of  commodities,  both  in  domestic  and  foreign  trade. 
When  writers  assert  that  "  money  is  the  medium  for  effecting  the 
exchange  of  commodities,"  they  simply  mean,  that  being  the  meas- 
ure of  values,  the  owner  of  it  may  procure  such  as  he  desires  with- 
out the  necessity  of  keeping  on  hand  one  kind  of  merchandise  to  bo 
exchanged  for  another.  The  object  and  purpose  of  money  is,  then, 
ia  promote  or  facilitate  the  commercial  transactions  between  indi- 
viduals and  countries,  by  doing  away  with  the  system  of  barter  or 
the  exchange  of  one  specific  description  of  merchandise  or  product 
of  labor  for  another.  But  to  do  this  it  was  necessary,  until  the  in- 
vention of  paper  currency,  payable  in  money  on  demand,  or  at  a 
specific  date,  came  into  vogue,  to  transfer  the  precious  metals  in 
the  shape  of  bullion  or  coin  from  the  purchaser  to  the  seller.  In 
a  small  community  there  miglit  not  be  much  inconvenience  in  this 
latter  method.  But  it  will  be  obvious  to  every  man  of  reflection 
that  in  largo  communities  and  wide-spread  transactions  great  incon- 
venience and  risk  would  ensue.  Hence  it  will  be  equally  obvious 
that  the  notes  of  a  solvent  bank,  or  a  government,  convertible  into 
gold  on  demand,  must  tend  greatly  to  promote  the  ends  of  com- 
merce, and  in  the  same  degree  stimulate  industry.  We  desire  to 
fix  these  universally  accepted  principles  on  the  minds  of  readers, 
because  they  form  the  groundwork  of  the  great  question  as  to  what 
kind  of  currency  we  shall  henceforth  have  in  this  country.      i     ,  ; 

'   The  Various  Kinds  op  Curbency  Used  in  Cojimerce. 

We  have  a  few  more  general  principles  to  elucidate  before  we 
can  reach  the  main  question  coming  up  for  discussion  in  Congress. 
We  have  to  state  the  fact  that  there  are  several  kinds  of  currency 
in  continual  use  in  commercial  countries.  First,  there  is  gold  and 
silver,  or  money  proper;  secondly,  the  demand  notes  of  solvent 
banks  and  governments,  which  are  divided  into  two  descriptions, 
governed  partly  by  the  same  laws — namely,  redeemable  according 
to  the  terms  of  the  promises,  and  irredeemable.  Both  kinds  are 
usually  received  and  pass  as  money,  and  may  properly  enough  be 
called  "  paper  money."  And,  thirdly,  all  other  kinds  of  commer- 
cial paper,  such  as  checks  on  bankers,  time  notes  and  bills  of  ex- 
change used  in  circulating  commodities.    These  constitute  the  cur- 


# 


J.  10 

rXnVr "^''*^  "'"'f  •    ^'^'"""^^  '^^'  ^'"^  "«t  •^^"^'"o^ly  used 
n  circulat.ng  commodities,  such  as  tl.o  bonds  of  governments 

states,  municipalities  and  corporations,  must  be  excluded,  as  not' 
passessing  the  requisites  of  c^rrency,  which  is  money,  or  its  repre- 
sentative or  equivalent  in  the  markets  of  the  world.  We  hav^ 
now  narrowed  the  subject  down  to  one  of  close  reasoning  and  dem^ 
onstration,  at  which  we  shall  endeavor  to  arrive.     . 

The  Poweu  of  the  State  or  Xation  to  Issue  Paper  Money 

Examined. 

(From  The  New  York  Herald,  ICth  Dec.  18C0  ) 

oullirT'  *°  '''"''^''  *^'  arguments  in  favor  of  maintaining 
our  nat  ona  currency  and  of  making  itfor  all  time  the  only  "papef 
money  of  the  nation.  We  have  already  shown  that  there  are  no 
be  t.r  reasons  in  favor  of  making  the  national  bank  currency  the 
on  y  paper  money  than  the  circumstance  of  its  accidental  origin, 
and  the  prescription  of  time,  which  may  be  pleaded  in  favoi  of 
most  of  the  "  time  honored"  vices  and  abuses  of  society.  The  accl 
dent  of  our  civil  war  has,  however,  given  us  a  circulating  medTum 

use    aJ'  TT  *'  '^r'-^''''''' ""''''  ^"  ''^'  ««««"*-!  object^ 
uses  and  advantages  of  a  paper  currency,  while  it  is  free  from  al 

the  evils  which  have  been  found  to  attend  that  of  bank  notes. 

the  duty  of  coming  money  and  of  regulating  the  value  thereof  is 
properly,  and  rightly  lodged  in  the  sovereign  power  of  t      State 
This  IS  a  pi-oposition  that  no  one  is  likely  to  dispute.    Tt  i«  1  .r 

would  b^d!'      ""''.*  '""P"''""*  ^™'"^°^  "f  government.  whTch  h 
would  be  dangerous  to  entrust  to  any  individual  or  corporation  who 

vnS  •  i  ^*''  "PP'^  '"^"^  "^"^^  ^^'•^^  t°  «'c  principles  in- 
into"  oW  Altrr'  '"«°«^«-«"t  of  paper  money,  convertible 
or,  1,^1  .  1  ^^  °f  P'^P''  ''  ^'  P'-^^^^^t  irredeemable  at  par 

of  inSr.;^^r''"  f'''  superabundance,  there  are  but  few  m^en 
of  influence  in  the  country  who  do  not  take  the  ground  that  we  must 
in  one  way  or  another,  get  back  to  a  specie  basil  or  to  a  resumZn 
of  specie  payments.  We  therefore  treat  the  subject  in  refcrenc  to 
SUCH  a  condition  of  things,  and  take  the  ground'that  the  is  u  ng  ^f 


|\ 


iiiii'Tiii-iiTfitar.' 


>t  commonly  used 
of  governments, 
excluded,  as  not 
)ney,  or  its  repre- 
orld.  Wo  have 
isoning  and  dem- 

! 

s  Paper  Money 


p  of  maintaining 
the  only  "paper 
iliat  there  are  no 
nk  currency  the 
ccidental  origin, 
ided  in  favor  of 
!iety.    The  acci- 
3ulating  medium 
essential  objects, 
t  is  free  from  all 
ank  notes, 
d  principle,  that 
value  thereof ia 
cr  of  the  State. 
0.    Tt  is  one  of 
nment,  which  it 
orporation  who 
3  reasons  which 
er  solely  in  the 
le  principles  in- 
ley,  convertible 
eemable  at  par 
re  but  few  men 
i  that  we  must, 
0  a  resumption 
in  reference  to 
;  the  issuing  of 


\ 


11 


that  description  of  currency,  which  wo  have  designated  in  former 
articles  as  "  paper  money,"  of  right  belongs  to  the  sovereign  power 
of  the  nation  or  State.  Money,  of  whatever  kind,  concerns  the 
whole  people,  and  the  experience  of  two  centuries  has  shown  that 
its  issue  in  any  form  cannot  be  entrusted  with  advantage  to  private 
corporations  or  individuals.  The  allegation  that  tlie  issue  and 
management  of  a  national  currency  opens  the  door  for  fraud  or 
party  abuse,  applies  with  exactly  the  same  force  to  the  coinage  and 
management  of  gold  and  silver  currency.  When  our  currency  shall 
become  convertible  on  demand  into  coin,  there  can  be  no  shadow  or 
pretense  for  urging  such  a  weak  argument  We  therefore  claim  it 
as  a  first  principle,  and  as  the  natural  right  of  the  people  to  have 
and  possess  the  sole  and  exclusive  power  to  issue,  through  their 
national  government,  both  the  gold  and  silver  money  and  the 
paper  money  founded  thereon,  for  the  purpose  of  economizing  the 
former  and  stimulating  industry  and  commerce.  The  reasons  in 
support  of  this  claim  or  riglit  are,  first,  because  no  corporation  or 
individual  can  offer  the  same  security  as  the  State,  which  represents 
the  whole  property  of  the  nation;  secondly,  because  the  important 
advantages  resulting  from  the  issue  and  circulation  of  paper  money 
should  enure  to  the  whole  people,  and  not  to  those  who  already  pos- 
sess a  largo  amount  of  accumulated  capital.* 

The  Question  of  Security  Considered. 

Let  us  briefly  consider  the  first  proposition — security.  Public 
confidence  in  the  ability  of  the  promisor  constitutes  the  first  ele- 
ment to  the  success  of  a  paper  circulation,  and  this  is  founded  on  the 
security  guaranteed  by  the  issuer.  If  the  government  offers  the 
highest  order  of  security,  then  it  is  manifest  that  a  government  cur- 
rency will  command  this  first  element  necessary  to  maintain  a  paper 
circulation.  If,  on  the  other  hand,  1,600  or  1,700  national  banks, 
which  Senator  Sumner  and  others  propose  to  increase  indefinitely, 
possess  individually  and  collectively  a  higher  order  of  security,  then 
their  notes  should  take  precedence  over  the  national  notes  in  this 
respect.    But  the  experience  of  this  country,  ever  since  the  issue 

*ThiB  article  was  written  before  the  writer  had  his  attention  directed  to  Mr.  Chase's 
report  to  Congress,  advocating  a  national  currency,  hereafter  quoted. 


i 


:i 


itBPWa«%,i«M«w»k;vi^,***^.,**»Kd<S^^ 


wmQikMitf 


ii  ■ 


leg*t,„„  ca„    ,t„  j„i,  „i,„„^,^        because  it  is  fo„„X  on  a 

onTv  a  verv?  "„*""'!.  "^  '"^^'^'^^^  P^"^''^.  ^^^  stockholders  fom 
only  a  very  small  portion  of  the  community.    On  the  nfT.Pr\o  T 

the  government  represents  the  resources  of  L  ll^nat" '^"'' 
Public  Conpidexce  Founded  ox  Natural  Laws. 

soui^efL'offaitrJl  ^''^^^^  ''  ''''"'''  'l-"*^^^'  -«'^  -  - 
guaranivTf  ie  nn?  ^^^r""^''"""*-  ^'  ''  ^^vious  that  the 
rsupe  io/to  th '^^^^^^         t^T  ^^'^^'^tial  elements  of  credit  must 

assert  tHthi^  il  •  "''T  ^'"^  ''  ^"^  """"^er  of  banks.  We 
assert  that  this  is  a  principle  or  law  of  nature,  which  likfi  «11  mhZ 
mcu-al  aws  that  relate  to  society,  is  the  resu  t  o    the  eo^^^^^^^^ 

g  eater  r:atr;  ^^'f  TJ'''  '''  ^^^^^^^^^  th^  rwhot  i 
greater  than  a  part  without  dispute.    Then,  on  the  ground  of  ^rpaf 

c^od^t^tLtnaT  """^^'^"^  ^  '^^^^''  orderofr/dencfa    ■ 
The  Right  op  the  People  to  Possess  the  Advaxtages  op  a 

whI!rbe?efit'«T'^°'*'''  *''  whole  people  should  possess  the 
Whole  benefit  arising  from  a  paper  circulation,  is  one  founded 
equally  ^,tU  the  first,  on  principles  of  natural  jus  ice.  If  as  we  111' 
know  there  is  a  great  advantage  accruing  to  those  on  wirthe 
State  (wrongfu  ly,  as  we  contend)  confers  The  privilege  of  ^^1 
paper  money  then  that  advantage  enures  of  right  to  Si  the  m  m^ 
bers  of  socety.    When  Senator  Sumner  and  hfs  adhere  ts  propose 


vocally  manifested 
an  to  Ocean.    No 
it  is  founded  on  a 
ler  than  the  laws 
bank  currency  is 
m  which  it  supor- 
•ity  from  the  gov 
le  Currency.  But 
icld  generally  as 
actuation  in  their 
lockholders  form 
the  other  hand, 
ole  nation. 

iL  Laws. 

ties,  such  as  re- 
Jbvious  that  the 
ts  of  credit  must 
of  banks.    We 
h,  like  all  other 
the  constitution 
lat  the  whole  is 
ground  of  great- 
'  confidence  and 
"  paper  money" 


antage3  op  a 
'rixciples   op 

lid  possess  the 
one  founded, 
If,  as  we  all 
5  on  wliom  the 
2ge  of  issuing 
all  the  mem- 
Tents  propose 


18 

to  grant  to  an  indefinite  number  of  private  corporations  advantages 
worth  forty  millions  a  year  they  simply  outrage  the  rights  of  the 
people.  They  propose  to  give  away  rights  founded  on  well  defined 
laws  of  nature,  and  tax  the  community  for  the  advantage  of  the  few. 
Tlie  proposal  to  retire  our  greenback  currency  and  to  substitute  in 
its  place  an  equal  amount  of  bank  paper,  belongs  to  the  old  and  op- 
pressive system  of  legislation  which  prevailed  a  century  ago  in  most 
European  countries.  It  is  a  palpable  and  manifest  design  to  in- 
crease and  perpetuate  an  unjust  monopoly.  The  cry  for  "  free  bank- 
ing" with  which  the  proposition  is  accompanied  is  simply  a  device 
to  cheat  the  public  out  of  its  rights.  The  parties  who  raise  this  cry 
do  not  mean  any  such  thing.  They  simply  contemplate  an  increase 
in  the  number  of  national  banks  and  of  the  bank  currency  to  the 
extent  of  the  suppressed  greenback  currency.  We  are  in  favor  of 
free  banking,  but  not  of  the  "  free"  issue  of  an  indefinite  amount  of 
bank  currency.  Let  the  already  exisiting  $300,000,000  of  national 
bank  notes  be  suppressed  and  their  place  filled  by  an  equal  amount 
of  national  notes.  Then  let  everybody  and  every  corporation  pos- 
sessing funds  have  a  perfect  freedom  and  equality  in  banking,  pre- 
cisely as  everybody  has  the  right  to  trade  or  follow  the  business  of 
a  merchant.  This  is  the  only  true  method  of  establishing  "i.ce 
banking."  It  is  the  system  partially  existing  in  England,  where 
most  of  the  joint  stock  banks  and  all  the  private  bankers  bank  on 
Bank  of  England  notes  and  specie. 

How   THE   National    Currency,  Paper   and    Gold,  must  be 

Managed. 

(From  The  New  York  Herald,  14th  Jan.,  1870.) 

Having  shown  that  the  reasons  in  favor  of  making  the  government 
the  sole  issuer  and  regulator  of  the  coin  or  metallic  currency  apply 
with  exactly  the  same  force  to  the  issuing  and  regulating  of  that  por- 
tion of  the  paper  currency  known  as  "  paper  money,"  in  consequence 
of  its  adaptation  to  all  the  essential  purposes  of  money,  we  propose 
to  point  out  the  necessity  of  making  provision  for  its  proper  "  regu- 
lation." Great  confusion  of  ideas  has  arisen  in  considering  this 
subject,  by  reason  of  the  clamor  raised  by  those  who  favor  the  re- 
tiring of  our  national  notes  and  substituting  in  their  stead  those  of 


-in»i;-sa;ig|*!iniii(ai«j,aj-    nOiniBiiitfai, 


•"rE??p-~'y  ^VaJ'  lawt. 


i  !' 


an  indefinite  number  of  national  banks.  This  has  grown  out  of  the 
simple  unsupported  assertion  that  "it  is  no  part  of  the  duty  of  gov- 
ernment to  do  a  banking  business."  t  t 

Principles  op  Banking  not  Involved  in  such  Management. 

Now,  it  is  not  pretended  by  the  advocates  of  a  national  paper 
currency  that  the  government  shall  turn  banker  any  further  than 
to  "  regulate  the  value"  of  such  currency,  as  provided  by  the  consti- 
tution in  reference  to  the  national  coinage.    It  is  a  fundamental 
error  to  suppose  that  the  issuing  of  demand  notes  to  be  used  as  cur- 
rency forms  a  part  of  the  necessary  business  of  banks  and  bankers. 
The  injurious  effects  resulting  from  an  indiscriminate  issue  of  bank 
notes  led  to  the  separation  of  the  issue  from  the  banking  depart- 
ment of  the  Bank  of  England  and  the  suppression  of  the  privilege 
in  respect  to  all  future  banks  and  bankers.    The  proper  business  of 
bankers  has  nothing   to   do   with  the  issuing  of  "  paper  money," 
or  demand  notes  to  be  used  as  money,  any  more  than  with  the 
metallic  coinage.    As  understood  and  defined  by  the  best  author- 
ities the  business  of  banking  is  to  trade  or  deal  in  money,  bills  of 
exchange,  the  promissory  notes  of  merchants,  manufacturers  and  all 
others  engaged  in  business  pursuits,  to  make  advances  on  all  such 
securities  and  on  merchantable  commodities  secured  by  bills  of 
lading  and  warehouse  receipts.    Paper  currency  is  quite  a  modern 
invention.    The  business  of  banking  is  as  old  at  least  as  the  days 
of  Moses. 

Though  it  may  not  be  admissible  for  governments  to  enter  into 
commercial  transactions  or  into  business  competition  with  the  public, 
it  does  not  follow  that  it  ought  not  to  do  whatever  the  principles 
involved  in  providing  the  nation  with  an  adequate  supply  of  paper 
money  clearly  indicate  as  needful  to  be  done.  If  the  principle  be 
once  established  that  the  government  is  the  proper  agent  for  pro- 
viding all  kinds  of  money  constituting  the  circulating  medium,  and 
has  power  to  "  regulate  the  value  thereof,"  it  clearly  follows  that  it 
ought  to  provide  the  necessary  machinery  for  its  management. 
This  power  in  respect  to  the  metallic  currency  is  imposed  on  the 
government  by  the  organic  law,  and  when  we  have  once  widened 
the  intent  of  such  law  to  the  issuing  of  paper  money,  it  becomes  of 
paramount  importance  to  establish  a  system  for  its  administration. 


I  InlltliliTiil'iiii  il  I 


1 


3  grown  out  of  the 
of  the  duty  of  gov- 

H  Management. 

E"  a  national  paper 
•  any  further  than 
ided  by  the  consti- 
is  a  fundamental 
to  be  used  as  cur- 
anks  and  bankers, 
late  issue  of  bank 
e  banking  depart- 
n  of  the  privilege 
proper  business  of 
f  "  paper  money," 
>re  than  with  the 
'•  the  best  author- 
in  money,  bills  of 
ufacturers  and  all 
ances  on  all  such 
Bured  by  bills  of 
3  quite  a  modern 
least  as  the  days 

ents  to  enter  into 
m  with  the  public, 
v^er  the  principles 
e  supply  of  paper 
f  the  principle  bo 
er  agent  for  pro- 
ting  medium,  and 
ly  follows  that  it 
its  management. 
5  imposed  on  the 
ve  once  widened 
ey,  it  becomes  of 
I  administration. 


W 


The  Excessive  Issue  op  Paper  Money  a  Serious  Mistake. 

We  have  now  arrived  at  the  grand  problem  demanding  solution. 
Had  the  framcrs  of  our  legal  tender  net  understood  the  principles 
which  govern  a  paper  currency,  or,  indeed,  any  other  kind  of  cur- 
I'ency,  the  nation  would  have  escaped  very  much  of  the  injury  it  has 
sustained  from  a  redundant  circulation,  the  evils  of  which  are  not 
yet  ended,  and  will  only  cease  by  an  appreciation  to  a  specie  basis. 
It  was  a  complete  misconception  of  first  principles  and  in  direct 
violation  of  sound  policy,  deducible  from  all  past  experience,  to 
issue  so  large  an  amount  of  inconvertible  paper  in  so  short  a  period. 
To  add  $500,000,000  to  the  ordinary  amount  of  bank  circulation, 
every  man  having  the  least  knowledge  of  banking  and  currency 
foresaw  would  produce  a  complete  unsettling  of  values  and  derange- 
ment of  our  monetary  and  commercial  aflfairs-  Even  though  the 
suspension  of  specie  payments  had  been  averted  by  some  miracu- 
lous circumstance,  such  an  amount  issued,  in  one  or  two  years,  must 
have  been  productive  of  mischief  by  being  in  excess  of  the  legiti- 
mate demands  of  commerce. 

These  considerations  servo  to  point  out  the  necessity  of  having  a 
department  of  the  government  created  to  manage  the  whole  business 
of  coining  money  and  issuing  and  managing  the  paper  currency. 
There  are  many  reasons  why  this  department  should  not  be  connect- 
ed with  the  Treasury.  The  management  of  the  national  finances 
and  the  provision  of  the  national  money,  or  circulating  medium,  are 
totally  diflferent  in  their  details  as  well  as  principles.  Until  they 
are  sparated  there  can  never  be  a  sound  and  scientifically  establish- 
ed system  of  currency  in  this  or  any  other  country.  The  tempta- 
tion to  issue  notes  in  excess  of  the  requirements  of  commerce  ought, 
for  the  reasons  already  stated  and  for  others  equally  obvious, 
not  to  be  left  in  the  way  of  a  minister  of  finance,  who  is  too  apt  to 
consult  only  his  immediate  necessities.  Had  this  provision  been 
clearly  settled  by  tho  Constitution  we  should  not  have  witnessed 
another  exemplification  of  the  folly  of  attempting  to  create  national 
resources  by  an  overissue,  or,  more  correctly  speaking,  an  excess- 
ive issue,  of  irredeemable  promises,  and  our  debt  would  not  have 
reached  much  above  one-half  its  present  volume. 


1. 
i 


,1^ 


^* 


Reasons  why   the 


10 

Banks  Should 

Notes. 


NOT  Issue    Ciuculatino 


Still  more  cogent  are  the  reasons  against  the  banks  being  endow- 
ed  with  the  prerogative  of  providing  any  portion  of  the  circulating 
medium.  Wo  have  conceded  that  it  does  not  belong  to  the  govern- 
ment to  supply  loanable  capital  to  the  community  or  to  trade  in 
money,  except  in  certain  emergencies,  and  for  a  strictly  temporary 
and  legitimate  purpose,  which  will  be  hereafter  referred  to.  But 
It  would  be  much  more  defensible  for  it  to  do  so,  than  it  is  to  per- 
mit the  continuance  of  a  practice  at  variance  with  the  natural  rights 
and  interests  of  the  people.  Tho  use  made  of  this  vast  power  by 
the  banks  exemplifies  the  utter  defencelessness  of  tho  principle  in- 
volved. It  is  an  undeniable  fact  that  the  banks  use  this  great  na- 
tional gift,  amounting  in  the  aggregate  to  $300,000,000,  to  earn  tho 
largest  possible  dividends  for  their  stockholders. 

This  is  a  question  we  have  a  right  to  go  behind.    We  have  a 
right  to  consider  the  uses  made  of  this  vast  free  gift,  which  ought 
to  enure  to  tho  advantage  of  industry  at  large.    In  order  to  earn 
the  largest  possible  dividends,  it  is  a  notorious  fact  that  tho  bulk 
of  the  banking  currency  is  used  to  aid  great  speculators  in  a  wide- 
ly  extended  system  of  stock  and  other  equally  pernicious  gambling 
in  the  products  of  labor.    Thus  the  bulk  of  our  loanable  capital  has 
become  a  monopoly  in  the  hands  of  a  limited  number  of  great  capi- 
talists, and  the  eflfect  is  to  make  the  rich  richer  and  the  poor  poorer. 
Though  we  may  not  bo  able  to  prevent  this  abuse  of  capital,  it  is 
nevertheless  a  powerful  reason  against  the  continuation  of  so  large 
a  State  gift  to  such  unworthy  recipients. 

Let  this  question  be  fairly  met.  Let  Mr.  Sumner,  the  great  cham- 
pion of  a  bank  in  preference  to  a  national  currency,  answer  it—is 
It  right,  or  justifiable,  on  any  national  grounds,  for  the  goTornment 
to  continue  what  seems  so  monstrous  a  wrong  on  tho  community  ? 
The  privilege  of  issuing  $300,000,000  of  currencv  cannot  be  worth 
less  than  $30,000,000  a  year.  The  prerogative  of  providing  the 
circulating  medium  and  of  being  the  sole  judge  of  its  sufficiency  can- 
not be  safely  trusted  in  the  hands  of  individuals  or  corporations 
It  belongs  of  right  to  the  nation,  and  the  nation  alone  should  pro- 
vide for  Its  emission  and  control  in  the  way  we  have  pointed  out 


iinirf'ri-Tiriiiini'Tiirriili; 


msmi 


iKfi'iiiiiiC-li'-'iinifii-'ii 


SUB    Circulating 

•anks  being  endnw- 
a  of  the  circulating 
long  to  the  govorn- 
nity  or  to  trade  in 
strictly  temporary 
r  referred  to.  But 
0,  than  it  is  to  per- 
tho  natural  rights 
his  vast  power  by 
f  the  principle  in- 
I  use  this  great  na- 
00,000,  to  earn  the 

• 

hind.  We  have  a 
» gift,  which  ought 
In  order  to  earn 
fact  that  the  bulk 
ulators  in  a  wide- 
rnicioua  gambling 
anable  capital  has 
iber  of  great  capi- 
i  the  poor  poorer, 
se  of  capital,  it  is 
nation  of  so  large 

r,  the  great  cham- 
icy,  answer  it — is 
r  the  government 
I  the  community  ? 
cannot  be  worth 
of  providing  the 
ts  RuflSciency  can- 
or  corporations, 
ilone  should  pro- 
lave  pointed  out, 


1 


IT 

or  in  some  other  equally  sound  and  reliable.  General  Garfield,  the 
able  and  accomplished  chairman  of  the  House  Committee  on  Banks 
and  Currency,  has  candidly  acknowledged  his  change  of  views  on 
this  most  important  question.  Ho  supports  our  theory,  and  so  will 
every  logical  mind  that  examines  the  subject  by  the  light  of  expcri 
once  and  the  aid  of  science. 

A  Board  of  Control  Rkcommended. 

What  is  needed,  then,  is  a  department  to  prepare  and  regulate 
our  money,  which  is  not  only  "  the  sinews  of  war,"  but  the  very 
hfe-blood  of  the  nation.    This  department  may  properly  be  called 
the  Board  of  Control.    It  should  be  composed  of  at  least  five  com- 
missioners, one  of  whom  might  be  a  cabinet  minister  and  the  pre- 
siding  officer.    The  others,  like  the  judges  of  the  Supreme  Court 
should  be  selected  for  their  peculiar  qualifications  for  the  duties  to 
be  discharged.    They  should  be  paid  in  proportion  to  the  high  re- 
sponsibility of  their  positions  and  the  ability  indispensible  to  the 
efficient  exercise  of  their  official  functions.    Like  the  judges,  they 
should  bo  made,  as  far  as  possible,  independent  of  political  influence, 
and  bo  removable  only  for  cause  shown  and  by  impeachment.    The 
position  of  the  presiding  officer  would  bo  analogous  to  that  of  the 
Master  of  the  Mint  in  England,  and  ho  would  be  the  medium  of 
communication  with  the  other  branches  of  the  government     We 
shall  not  enter  into  the  details  of  the  proposed  measure,  which 
would  require  much  careful  consideration  to  prepare.    These  details 
would  have  to  be  framed  in  reference  to  the  duties  the  commission- 
ers would  have  to  perform.    The  experience  of  the  Managers  of  the 
Mint  and  of  the  Currency  Bureau  would  no  doubf.  be  valuable 
But  the  Board  of  Control  should  have  very  extensive  discretionary 
powers.    We  also  propose  to  make  the  Board  of  Control  the  de- 
pository of  all  the  funds  of  the  government  at  present  received  and 
disbursed  through  and  by  the  Secretary  of  the  Treasury.    This 
would  bo  necessary  in  order  to  concentrate  the  whole  financial 
power  of  the  government  in  aid  of  the  system  which  is  to  be  thus 
made  permanent.     It  would  take  the  place  held  by  the  Bank  of 
England  in  respect  to  the  British  government.    The  board  would 
therefore,  have  to  establish  agencies  wherever  it  has  been  found 
necessary  to  do  so  by  the  Treasury.    It  would,  in  fact,  occupy  the 


■• 


ifattMiiitfMUimiMtt 


ifalta 


i 


u 

ground  at  present  in  possession  of  that  department,  and  the  Secre- 
tary of  the  Treasury  would  deposit  nil  the  funds  of  the  nation  in 
tlie  af?encic8  in  question  and  draw  his  requisitions  for  the  same  when 
needed. 

The  BoAnn  to  Reoulate  the  Volume  ok  CunRENCT  Accord- 
ing TO  Scientific  Principles  and  Experience. 

The  board  should  bo  the  sole  judge  of  the  amount  of  paper  money 
or  demand  notes  necessary  to  bo  issued  and  kept  in  circulation. 
On  this  point  hinges  the  grand  feature  of  the  proposed  reform— wo 
might  almost  call  it  a  revolution— in  the  management  of  our  cur- 
rency. A  volume  might  bo  written  to  demonstrate  by  past  expe- 
rience the  beneficent  results  which  would  follow  the  establishment 
of  a  well  regulated  system  of  money  or  circulating  medium.  Wo 
reserve  for  another  occasion  tho  elucidation  of  the  principles  which 
would  guide  the  Board  of  Control  in  the  exercise  of  its  high  func- 
tions. 

(The  followiog  arlldei  h»v«  not  before  been  publUhed.') 

The  Testimony  op  Chief-Justice  Chase  in  favor  of  a  National 

cuubency. 

Mr.  Chase,  when  Secretary  of  tho  Treasury,  in  his  report  to  Con- 
gress in  December,  1S61,  suggests  the  following  cogent  reasons  in 
favor  of  a  national  currency.  "  To  enable  the  Government  to  ob- 
tain the  necessary  means  for  prosecuting  the  war,  without  unneces- 
sary cost,  is  a  problem  that  must  engage  the  most  careful  attention 
of  the  legislature."  He  then  goes  on  to  say,  "  the  circulation  of  the 
banks  of  the  United  States  on  tho  first  day  of  January,  1861,  was 
computed  to  be  $202,000,707.  Of  this  circulation  $150,000,000,  in 
round  numbers,  was  in  the  States  now  loyal,  including  Western  Vir- 
ginia, and.  $50,000,000  in  the  rebellious  States.    The  whole  op  this 

CIRCULATION  CONSTITUTES  A  LOAN  WITHOUT  INTEREST  FROM  THE  PEO- 
PLE  TO  THE  BANKS,  COSTING  THEM  NOTHING,  OXCOpt  the  expense  of 

issue  and  redemption,  and  the  interest  on  the  specie  kept  on  hand 
for  the  latter  purpose ;  and  it  deserves  consideration  whether  sound 
policy  does  not  require  that  the  advantages  of  this  loan  be  trans- 
ferred, in  part  at  least,  from  the  banks,  representing  only  the  in- 


Id 


nt,  and  the  Sccro- 
s  of  the  nation  in 
For  the  same  whon 


riRKNCY  Accord- 

EUIENCE.  J 

it  of  paper  money 
pt  in  circulation. 
)08C(1  reform — wo 
ment  of  our  cur- 
ito  by  past  cxpe- 
tlio  establishment 
ig  medium.  Wo 
principles  which 
I  of  its  high  func- 

ed.) 

R  OP  A  National 

is  report  to  Con- 
ogent  reasons  in 
overnment  to  ob- 
without  unneces- 
careful  attention 
3irculation  of  the 
nuary,  1861,  was 
$150,000,000,  in 
ing  Western  Vir- 

lE  WHOLE  OF  THIS 
3T  FROM  THE  PEO- 

t  the  expense  of 
sio  kept  on  hand 
•n  whether  sound 
8  loan  be  trans- 
ing  only  the  in- 


terests of  the  stockholders,  to  tlio  (Jovernnicrit  representing  the  n^- 
gregato  interest  of  the  whole  people." 

The  Secretary  next  questions  the  right  of  States  to  confer  on 
banks  the  power  to  issue  a  circulating  medium,  and  then  proceeds 
to  say,  "  hoicever  thia  may  be,  it  ia  too  clear  to  he  reasonably  dinjmU'd 
that  Congress,  under  its  constitutional  poicirs  to  lay  taxes,  to  regu- 
late commerce  anrl  to  regulate  the  value  of  coin,  possesses  amjAe  au- 
thority to  control  the  credit  circulation  tahich  enters  so  largely  into  the 
transactions  of  commerce  and  affects  in  so  many  ways  the  value  of 
coin.  In  the  Judgment  of  the  Secretary,  the  time  has  arrived  when 
Congress  should  eaeercisc  this  authority."  •  * " 

In  the  face  of  such  arguments,  with  what  consistency  could  Mr. 
Chase  subsequently  demand  the  passage  of  a  National  Bank  Bill 
for  $300,000,«00,  thus  making  tiio  enormous  gift,  or,  as  ho  himself 
termed  it,  "loan  without  interest,''  of  $150,000,000  to  those  who 
were  invited  to  form  new  banks  under  that  act?    It  is  true,  the 
proprietors  of  these  additional  banks  were  obliged  to  purchase 
$165,000,000  of  Government  securities,  to  bo  lodged  with  the  Comp- 
troller, before  they  could  avail  themselves  of  this  great  benefac- 
tion.    But  it  will  be  seen  that  the  Secretary,  as  the  authorized 
agent  of  Congress,  supplied  the  purchasers  with  ninety  per  cent,  of 
the  purchase  money,  in  the  shape  of  national  bank  notes.     The 
net  result,  then,  was  $15,000,000  to  the  Government,  when  it  might, 
and  of  right  ought  to  have  had  the  benefit  of  the  whole  $165,000,(100. 
If  the  Secretary  had  granted  this  loan  without  interest  to  the 
nation,  instead  of  to  the  bondholders,  to  enable  them  to  establish 
banks  for  their  own  profit,  it  would  have  saved  the  necessity  of  bor- 
rowing $150,000,000,  and  compelling  the  nation  to  pay  interest 
therefor.    If  we  compute  compound  interest,  which  we  have  a  right 
to  do,  on  this  sum,  our  debt,  according  to  Mr.  Chase's  own  show- 
ing, would  now  be  $212,500,000  less  than  it  is,  and  Mr.  Boutwell 
could  reduce  taxes  to  the  amount  of  $12,750,000  a  year,  or  have 
that  sum  to  add  to  the  sinking  fund  for  the  current  year  more  than 
he  has,  and  this  would  go  on  increasing  each  year  at  compound  in- 
terest.   So  much  for  Mr.  C!i  ise's  financiering. 

There  was  at  least  a  fair  ground  for  making  such  a  concegsion  to 
the  State  banks,  whose  capital  amounted  to  $160,000,000,  for  the 
abandonment  of  franchises  and  benefactions  conferred  on  them  by 


1  ii'.  < 


States.  Hut  aa  tho  wliolo  $300,000,000  of  tho  pcoplo'H  money, 
credit  or  capital,  call  it  hy  what  name  you  ploaso,  «o  genorouBJy 
bestowed  by  Coiigresn  on  tho  wealthy  claBHCS,  making  them  so  much 
richer  and  tho  laboring  claHscs  ho  much  poorer,  has  bccorao  a  vostod 
and  legal  right,  according  to  tho  laws  of  Congress,  tho  present  bank 
proprietors  should  perhaps  bo  indemniliod  if  tho  "  loan  without  in- 
terest "  should  bo  withdrawn  in  order  to  give  to  tho  country  a  uni- 
form national  currency.  On  this  point  wo  have  nothing  further  to 
say.  Wo  are  discussing  principles.  If  they  are  true  and  well 
established,  it  remains  for  Congress  to  remove  all  difiicultics  and 
give  them  effect.  Tho  banks  themsolvos  should  bo  tho  first  to 
recognize  the  desirability  of  establishing  a  permanent  and  ecientiflc 
circulating  medium,  and  would  no  doubt  moot  the  Govornmont  half 


way. 


j'.i 


>;^(tt 


s  :  'i  h-:>"- 


Free  BANKrmj. 


Under  such  a  system  of  currency,  free  banking  becomes  a  neces- 
Bity.  There  is  no  more  justification  in  limiting  the  right  to  organ- 
ize joint  stock  banks  to  some  1,000  institutions,  or,  to  speak  more 
correctly,  to  limit  tho  gross  amount  of  capital  to  bo  allotted  to  any 
number  of  such  institutions,  than  there  is  to  limit  tho  number  of 
traders  and  manufacturers,  and  tho  amount  of  capital  they  shall 
employ  in  their  respective  pursuits.  The  business  of  banking  con- 
sists in  trading  in  money,  bills  of  exchange,  &c.  All  who  choose  to 
form  themselves  into  associations  are  entitled  as  a  natural,  inherent 
right  to  tho  privilege  of  doing  so,  to  tho  extent  of  thoir  means,  just 
as  merchants,  manufacturers  and  others  are  authorized  to  do  under 
general  laws.  Nor  have  bankers  or  banking  companies  any  greater 
claim  on  the  public  at  large  for  Government  benefactions,  or  "loans 
without  interest,"  than  other  trading  and  manufacturing  corpora- 
tions. 

What  the  Cby  for  Free  Banking  at  present  Means. 

The  moment  wo  divest  our  minds  of  the  unfounded  idea  that 
banks  are  the  proper  sources  for  supplying  the  circulating  medium 
-the  moment  we  concede  that  right  and  that  duty  to  the  nation 
the  monstrous  absurdity  of  our  present  system  of  banking  becomes 
apparent.    At  present  the  cry  for  free  banking  means  the  right  to 


)  pcople'a  monoy, 
so,  80  gcnorouBly 
iiig  tlicni  80  mucli 
8  become  a  vested 
the  present  bank 
'  loan  witliout  in- 
Ito  country  a  uni- 
lothing  further  to 

0  true  and  well 
II  difficulties  and 

1  bo  the  first  to 
ent  and  scientiflo 
Oovcrnmeut  half 


becomes  a  neces- 
0  riglit  to  organ- 
r,  to  speak  more 
0  aUotted  to  any 
t  the  number  of 
ipital  tlioy  shall 
of  banking  con- 
.11  who  choose  to 
Qatural,  inherent 
their  means,  just 
izcd  to  do  under 
inies  any  greater 
ctiona,  or  "loans 
;turing  corpora- 
NT  Means. 

mded  idea  that 
ulating  medium 
y  to  the  nation, 
anking  becomes 
ans  the  right  to 


tl 

convcyt  tli(  hole  national  d«ht  into  a  baHis  for  the  Ihsuo,  l)y  the 
Comptroller,  of  "  loans  without  intorpst,"  in  the  shapo  of  niitional 
bank  notes.  It  is  simply  a  proposition  to  onable  the  holders  of 
national  HPciiritics  to  own  thfrfo  desirtble  investments,  draw  the  in- 
terest on  the  same,  and,  at  the  satno  time,  get  90  per  cent,  of  their 
par  value  in  money  a»  a  bonus.  Why  should  not  the  owner  of  a 
house  or  farm  have  the  same  right  accorded  to  liim  ?  Thin  is  just 
what  that  eminent  Scotch  financier  of  150  years  ago,  John  Law,  j)ro. 
posed.  It  is  in  fact  a  proposition  involving  the  monstrous  absurd- 
ity that  a  man  may  own  his  property  and  at  the  same  time  possess 
the  value  or  price  of  it  in  money. 

The  Nkw  Tiieobv  of  Fuee  Bankino. 
When  wo  have  only  a  national  currency,  redeemable  at  par  in 
specie,  it  will  at  once  bo  seen  that  no  possible  evil  can  arise  from 
perfect  freedom  in  banking.  The  nation's  raoue)  being  under  the 
regulation  of  an  intelligent  Board  of  Experts  or  Control,  such  as 
we  have  suggested,  would  always  bo  kept  up  to  a  volume  adequate 
to  the  growing  business  of  the  country,  and  anybody  of  individuals 
desiring  to  organize  as  a  banking  corporation  should  be  allowed 
every  facility  for  so  doing.  The  power  of  granting  franchises  might 
be  left  with  such  board,  or  with  any  other  authorized  official. 

The  Fallacy  op  "  An  Equitable  Distribution  of  the  Cuk- 

There  are  several  bills  now  in  Congress  intended  to  provide  for 
a  more  equal  distribution  of  the  currency,  the  real  object,  how- 
ever, of  nearly  every  one  being  to  enable  a  number  of  bondholders 
and  speculators  to  get  their  hands  into  the  national  treasury. 
They  all  aim  to  retire  a  part  or  the  whole  of  the  national  notes, 
and  to  substitute  in  their  places  bank  notes,  predicated  on  national 
securities.  The  bill  which  seems  most  likely  to  become  law,  unless 
the  President  interposes  his  veto  power,  is  that  which  has  passed 
the  Senate,  and  is  now  before  the  House  Committee  on  Banking 
and  Currency,  of  which  General  Garfield  is  chairman.  The  object 
of  that  bill  is  professedly  to  "equalize  the  distribution  of  the  cir- 
culating notes."  It  proposes  to  retire  $45,000,000  of  three  per 
cent,  temporary  loan  certificates,  and  to  issue  to  certain  Southern 


22 


and  Western  States  as  a  "  loan  without  interest"  an  equal  amount 
of  money  in  the  sliape  of  national  bank  notes. 

Nothing  can  be  more  flimsy  than  the  reasons  urged  for  this 
additional  act  of  plunder.  These  three  per  cents,  serve,  to  some 
extent,  the  purposes  of  currency,  and  in  order  to  retire  them  the 
Secretary  must  borrow  at  a  higher  rate  of  interest  and  thus  add  to 
the  debt,  or  he  must  use  his  surplus  revenue  if  he  has  any  for  that 
purpose.  National  bank  notes,  by  reason  of  their  being  secured  by 
government  bonds,  possess  the  quality  of  uniformity  of  value  in 
every  section  of  the  country.  Now,  it  is  a  law  of  currency,  or 
money  possessing  this  quality,  to  continually  flow  to  the  great 
oceans  or  centres  of  commerce  (just  as  water  finds  its  way  through 
innumerable  rivulets  and  streams  to  the  oceans  and  lakes),  whence 
it  is  carried  back  to  purchase  and  transport  to  market  the  varied 
products  of  labor.  Only  such  an  amount  is  retained  as  is  necessary 
for  local  requirements.  The  laws  of  nature,  which  keep  up  a  per- 
P'oiual  circulation  of  the  waters  of  the  earth,  admirably  illustrate 
the  laws  of  currency. 

Then  what  a  transparent  humbug  it  is  for  Congress  to  put  for- 
ward such  a  pretext,  for  what  every  man  who  votes  for  the  measure 
knows  to  be  a  gross  fraud  on  the  rights  of  the  people.  It  is  said 
that  many  of  the  prominent  members  who  support  this  measure  do 
so  to  meet  the  demands  of  a  powerful  lobby  and  satisfy  clamorous 
constituents. 

No  explanation  or  apology  can  change  the  plain,  unvarnished 
facts  and  fallacies  involved  in  this  and  all  similar  proposals  to 
increase  the  bank  circulation  at  the  public  expense.  To  accept 
of  Senator  Sumner's  bill  would  be  to  increase  the  national  debt 
$200,000,000  and  to  present  the  avails  to  the  bondholders. 

Who  will  profit  by  the  Pboposed  Redistribution  ? 

We  are  assured,  by  well  informed  persons,  that  a  considerable 
number  of  Senators  and  members  of  the  House  who  favor  these 
projects  are  entirely  reckless  of  consequences;  that  nearly  all  such 
have  friends  and  partisans  who  are  anxious  for  a  measure  which 
promises  to  open  a  vast  field  of  speculation  and  wealth  to  a  few  at 
the  expense  of  the  country.  It  is  asserted  that  there  are  now 
many  Southern  and  Western  men  in  this  city  engaging  Govern- 


in  equal  amount 

urged  for  this 
.  serve,  to  some 
retire  them  the 
and  thus  add  to 
has  any  for  that 
)cing  secured  by 
aity  of  value  in 
of  currency,  or 
17  to  the  great 
its  way  through 
i  lakes),  whence 
irket  the  varied 
.  as  is  necessary 
keep  up  a  per- 
rably  illustrate 

fress  to  put  for- 
for  the  measure 
)ple.  It  is  said 
this  measure  do 
itisfy  clamorous 

in,  unvarnished 
IT  proposals  to 
ise.  To  accept 
3  national  debt 
olders. 

IBUTION  ? 

a  considerable 
rho  favor  these 
nearly  all  such 
measure  which 
ilth  to  a  few  at 
there  are  now 
jaging  Govern- 


1 


28 

ment  bonds  on  which  to  organize  Southern  and  Western  national 
banks,  under  the  Senate  currency  bill.  The  process  is  an  easy  one, 
and  when  it  is  understood  the  complete  deception  of  "  redistribution" 
will  be  perceived.  We  will  suppose  it  to  be  sought  to  establish  a 
national  bank  with  a  paid  up  capital  and  circulation  of  $1,000,000. 
The  new  organization  will  have  to  provide  bonds  of  the  par  value  of, 
say,  $1,100,000,  the  notes  to  be  issued  thereon  being  90  per  cent. 
The  only  capital,  tliereforc,  required  to  complete  a  legal  organization 
would  be  the  margin  of  $100,000  and  the  premium  on  the  bonds, 
which  may  be  called  10  per  cent.  (It  may  be  nothing  wlien  gold 
falls  to  par.)  Tliis,  added  to  the  $100,000,  makes  $200,000.  The 
remaining  purchase  money,  amounting  to  $1,000,000,  the  Govern- 
ment will  generously  advance,  in  the  shape  of  a  "perpetual  loan, 
without  interest"— for  these  very  "circulating  notes"  may  be  used 
to  pay  the  whole  of  this  $1,000,000— towards  the  bonds  which  are 
to  be  made  security  for  the  notes.  This,  of  course,  will  not  be 
done  in  quite  so  direct  a  manner  as  wo  have  stated  it.  The  form 
of  discounting  a  number  of  pieces  of  commercial  paper,  and  per- 
haps a  number  of  other  forms  known  to  modern  masters  of  finance, 
will  probably  be  complied  with,  in  order  "to  cover  up  the  tracks" 
of  the  operators.  But  the  net  result  will  be  a  full-blown  national 
bank,  located,  we  will  say,  in  some  remote  Western  or  Southern 
city.  It  will  thus  be  seen  that  the  "apportionment"  of  the  $1,000,000 
for  that  particular  locality  first  serves  the  purpose  of  a  grand 
stock  or  bond  operation  in  Wall  or  Broad  Street. 

But,  it  will  be  asked,  where  is  the  capital  for  "banking"  to  come 
from?  Oh,  that  is  the  easiest  thing  in  the  world.  The  managers 
will,  of  course,  take  the  best  building  in  the  far  oft"  city,  and  make 
a  display  of  a  few  tliouaand  dollars  of  their  bran-new  notes,  and 
will  receive  deposits  and  commence  selling  bills  on  New  York.  If 
they  are  smart,  this  will  soon  furnish  funds  for  the  discount  of  prime 
commercial  paper,  and  supply  the  requisite  amount  of  greenbacks 
for  the  redemption  of  any  stray  notes  that  may  find  their  way  from 
New  York,  where  they  are  soon  mixed  up,  promiscuously,  in  and 
with  the  great  ocean  of  currency,  national  and  bank.  Will  Presi- 
dent Grant  investigate  this  question,  in  the  interest  of  labor  and 
honest  industry,  before  putting  his  signature  to  any  such  measure  ? 
So  much  for  the  cry  for  "redistribution,"  raised  to  humbug  the 
public. 


24 


III 


i 


i 


Testimony  op  IIox.  Mr.  Spauldino. 

It  is,  perhaps,  not  saying  too  much  to  assert  that  the  country  owes 
It  more  to  the  Hon.  Elbridoe  G.  Spauldino,  of  Buffalo,  than  to  any 
other  man,  that  it  has  enjoyed  the  vast  advantai^cs  of  sound  national 
currency  during  the  last  eight  years.    It  is  extremely  doubtful 
whether  the  war  could  have  been  successfully  prosecuted  but  for 
this  currency.     Indeed,  it  is  almost  demonstrable  that  it  would 
have  terminated  ingloriously,  before  the  end  of  the  second  or  middle 
of  the  third  year,  but  for  Mr.  Spaulding'g  determined  and  success- 
ful efforts  to  establish  our  national  currency.    It  was,  beyond 
question,  the  motive-power  that  set  our  armies  and  navies  in  active 
motion,  and  at  the  same  time  stimulated  productive  labor  every- 
where to  provide  the  means  necessary  to  the  occasion.    Mr.  Spauld- 
mg  has  lately  published  a  valuable  financial  history  of  the  war  in 
which  he  modestly  takes  less  credit  to  himself  than  he  is  entitled'  to 
for  the  part  he  took  in  carrying  through  Congress  the  first  and  sub- 
sequent measures  authorizing  the  issue  of  "treasury  notes,  payable 
on  demand."    Mr.  Chase  only  "  suggested"  such  an  issue,  but  pre- 
ferred and  recommended  what  he,  himself,  designated  the  raising  of 
money  by  granting  "  loans  without  interest"  to  a  vast  number  of  na- 
tional banks,who  wore  to  use  these  loans  to  purchase  interest-bearing 
bonds  of  the  United  States.    Mr.  Spaulding,  as  chairman  of  the 
sub-committee  of  Ways  and  Means,  "recommended,"  and  by  a  con- 
vincing and  powerful  speech,  carried  the  measure  that  gave  us  the 
first  and  subsequent  issues  of  greenbacks,  which  may  properly  be 
called  the  people's   money,  in  contradistinction  to  the  banks' 

MONEY. 

While  making  this  just  concession  to  Mr.  Spaulding,  we  might 
perhaps,  be  able  to  demonstrate  that  a  great  error  was  committed 
m  not  suppressing  the  entire  bank  circulation,  making  adequate 
compensation  for  it  by  payment  of  damages  in  treasury  notes,  and 
then  maintaining  specie  payments.  The  Government  had  the  power 
through  its  revenue  channels,  of  controlling  all  the  gold  in  the 
country,  at  that  time  amounting,  according  to  the  estimate  of 
Secretary  Chase,  to  $275,000,000.  On  such  a  basis,  or  even  on  half 
that  sum,  the  nation,  with  all  its  vast  resources,  could  have  main- 
tained specie  payments  on  a  circulation  of  $500,000,000,  and  that 


26 


NO. 

the  country  owes 
ffalo,  than  to  any 
)f  sound  national 
;remcly  doubtful 
osccutcd  but  for 
le  that  it  would 
second  or  middle 
nod  and  success- 
It  was,  beyond 
navies  in  active 
;ive  labor  cvery- 
tn.    Mr.  Spauld- 
y  of  the  war,  in 
he  is  entitled  to 
he  first  and  sub- 
j  notes,  payable 
n  issue,  but  pre- 
5d  the  raising  of 
3t  number  of  na- 
interest-bearing 
chairman  of  the 
"  and  by  a  con- 
liat  gave  us  the 
lay  properly  be 
to  the  banks' 

ling,  we  might, 
was  committed 
iking  adequate 
sury  notes,  and 
had  the  power, 
le  gold  in  the 
lie  estimate  of 
)r  even  on  half 
uld  have  main- 
>,<)00,  and  that 


amount  would  have  been  ample  for  all  the  fiscal  purposes  of  the 
war. 

Tub  Wau  should  havb  been  Fought  on  a  Specie  Basis. 

The  idea  of  selling  the  government  securities  below  par  was  a 
bugbear  at  which  Mr.  Spaulding  and  otiiers  became  frightened,  and 
they  fell  into  the  error  of  issuing  too  large  a  volume  of  circulating 
medium,  which  finally  reduced  tlie  proceeds  of  loans  to  only  fifty 
cents  on  the  dollar  of  gold.  With  the  enormous  increase  of  com- 
mercial and  industrial  transactions,  caused  by  the  war  and  by  the 
extraordinary  development  of  our  railway  system  just  prior  there- 
to, $500,000,000  Mas  not  too  largo  a  volume  of  currency,  and 
would  now  be  too  small,  even  on  a  specie  basis.  No  one  will  dis- 
pute the  assertion  that  the  war  might  have  been  prosecuted  on  a 
greatly  reduced  expenditure  if  we  had  maintained  specie  payments, 
even  if  our  bonds  had  to  be  sold  at  ten,  twenty,  or  even  thirty 
discount. 

But  we  have  not  space  to  enter  into  an  elaborate  argument  on 
this  particular  point.  We  simply  desire  to  givfi  Mr.  Spaulding 
the  credit  he  is  entitled  to  as  the  real  father  of  the  national  cur- 
rency, lie  still  adheres  to  the  principle  thatit  ought  to  be  main- 
tained as  a  permanent  institution,  as  wo  understand  from  a  letter 
received  from  him,  in  which  he  says  he  has  not  changed  his  views 
as  expressed  in  his  speech  at  the  meeting  last  year  of  the  National 
Bank  Association,  wherein  he  proclaims  his  strong  predilection  for 
the  greenback  currency.  Mr.  S.,  from  his  extensive  scientific  and 
practical  knowledge  of  banking  and  currency,  and  as  a  practical 
legislator,  is  just  the  man  to  be  placed  at  the  head  of  the  proposed 
Board  of  Control.  , 

The  Testimony  op  the  late  Hon.  Thaddeus  Stevens. 

At  the  close  of  the  debate  in  the  House  on  the  first  legal  tender 
national  currency  bill,  when  Mr.  Stevens  submitted  a  substitute 
for  Mr.  Spaulding's  bill,  then  under  consideration,  the  former  gen- 
tleman, in  his  usual  vigorous,  terse  and  forcible  manner,  remarked, 
"  The  national  bank  scheme  recommended  by  the  Secretary  (Chase) 
might,  in  ordinary  times,  be  very  useful;  but  while  the  banks  are 
under  suspension  it  was  not  easy  to  see  how  it  would  relieve  the 


government.  They  ivonld  have  the  circulation  without  interest,  and 
at  the  same  time  tvould  draw  interest  on  the  bonds,  and  afford  no 
.inmedjate  relief.  He  thought  the  government  sliould  have  the 
heneht  of  the  circulation  of  the  legal  tender  notes." 

Those  and  other  equally  cogent  and  patriotic  arguments  urged 
Dy  Mr.  Stevens  in  support  of  this  great  measure  were  evidently  the 
result  of  a  plain,  unprejudiced  and  common  sense  view  of  the  ob- 
ject, uses  and  principles  of  a  paper  currency,  rather  than  of  any 
deep  knowledge  of  the  science  of  money;  for  he,  like  most  who 
spoke  on  the  bill,  did  not  exhibit  evidence  of  a  careful  study  of 
this  complicated  subject.    Although  Mr.  Stevens'  substitute  was 
adopted,  It  was  so  like  Mr.  Spaulding's  bill  as  to  almost  amount  to 
a  distinction  without  a  difference.   The  only  material  change  made 
consisted  in  increasing  the  issue  of  greenbacks  from  $100,000,000 
to  !t.l50,000,000,  and   the  retirement  of  i!50,000,000  of  treasury 
notes  previously  issued  by  authority  of  Congress.    Mr.  Stevens,  to 
put  the  matter  more  clearly  before  Congress,  observes:  "If  the 
$150,000,000  were  constantly  afloat  it  would  be  a  loan  to  the  gov- 
ernment without  interest  to  that  amount,  $9,000,000  a  year."    He 
might  still  further  have  pointed  his  argument  by  adding  that  the 
scheme  recommenced  by  the  Secretary  » (Chase)  would  just  reverse 
the  case,  and  give  to  the  banks  (which  he,  the  Secretary,  favored) 
that  amount. 

If  the  President  and  Secretary  Boutwell  take  these  fathers  of 
the  national  currency  as  models  for  their  guidance,  we  may  yet  be 
spared  the  addition  of  $400,000,000  to  our  debt  and  over  $20,000,000 
a  year  to  the  national  burdens  proposed  by  such  men  as  Senators 
bumner,  Sherman  and  others,  who  wish  to  fund  our  greenback  cur- 
rency and  grant  an  equal  amount  of  money,  without  interest,  to 
the  bondholders  for  the  organization  of  national  banks-their  main 
argument  being,  as  we  have  before  stated,  that  the  former,  as  "a 
war  measure,"  ought  to  be  abolished  in  times  of  peace.    In  other 
words  the  Union  being  no  longer  in  danger,  the  nation  can  afford 
to  make  this  enormous  gift  to  the  wealthy  classes,  and  raise  the 
means  to  do  it  by  taxing  the  labor  of  the  people-for  all  taxes 
come  primarily  from  labor.    But,  as  if  to  make  the  proposition 
more  aggravating  and  conspicuous,  they  propose  to  exempt  these 
bondholders  altogether  from  taxation.     Can  those  gentlemen  hope 


"wm 


'thout  interest,  and 

nds,  and  afford  no 

sliould  have  the 

!  arguments  urged 
vere  evidently  the 
e  view  of  the  ob- 
ther  than  of  any 
e,  like  most  who 
a  careful  study  of 
is'  substitute  was 
almost  amount  to 
'rial  change  made 
i-om  $100,000,000 
1,000  of  treasury 

Mr.  Stevens,  to 
(bserves:  "  If  the 

loan  to  the  gov- 
100  a  year."  He 
r  adding  that  the 
irould  just  reverse 
cretary,  favored) 

these  fathers  of 
e,  we  may  yet  be 
over  $20,000,000 
men  as  Senators 
r  greenback  cur- 
hout  interest,  to 
nks — their  main 
le  former,  as  "  a 
leace.    In  other 
ition  can  afford 
s,  and  raise  the 
Q— for  all  taxes 
the  proposition 
to  exempt  these 
gentlemen  hope 


87 

that  such  a  proposition,  if  consummated,  will  go  unchallenged  by 
the  country  ?  °  e       j 

When  the  $150,000,000  bill  passed  the  Senate  manv  Senators, 
but  more  especially  Messrs.  Fessenden  and  Sumner,  voted  for  it  as 
It  were,  under  protest,  that  it  was  to  be  regarded  only  in  the  light 
of  a  financial  expedient  of  the  war.    The  former  gentleman  said, 
It  has  been  defended  simply  and  solely  npon  the  ground  that  it  is 
M     «t«^Ze  measure,  standing  by  itself,  and  not  to  be  repeated." 
^^  Mr.  Sumner  was  equally  pronounced  in  his  judgment,  and  said 
loe  must  all  set  our  faces  against  any  provosition  like  the  present 
except  as  a  temporary  expedient,  rendered  necessary  by  the  exigency 
of  the  hour."    Mr.  Sumner  still  adheres  to  this  view,  but  neither 
then  nor  now  has  offered  a  single  reason  against  the  principles  in- 
vovcd  m  the  question  of  conceding  to  the  government  the  solo 
duty  and  right  to  supply  our  paper  money-just  as  it  is  its  unques- 
tioned duty  and  right  to  supply  the  coin  or  metallic  money.    If 
indeed,  our  fathers  had  been  stupid  enough  to  have  so  framed  the 
Constitution  as  to  have  prohibited  the  issue  by  government  of 
paper  money,  statesmen  should  at  once  set  to  work  to  amend  it. 
Will  Mr  Sumner,  as  the  most  prominent,  able  and  emphatic  sup- 
porter of  a  bank  currency  (to  be  "loaned  to  the  banks  without 
interest   ),  meet  the  case  fairly  and  squarely  as  it  has  been  pre- 
sented  in  these  pages  ?    Let  him  tell  us  wherein  the  bank  currency 
predicated  on  public  securities  is  safer  or  better  than  one  secured 
on  the  resources  of  the  whole  people,  through  the  action  and  under 
the  control  and  management  of  governmcat.    Is  there  any  reason 
arising  out  of  the  nature  of  things,  or  any  argument  deducible  from 
natural  reason,  or  from  practical  experience,  why  that  which  he 
supported  in  1862,  on  the  grounds  of  expediency  only,  is  not  the 
best  for  all  time  ?    We  have  endeavored  to  demonstrate  our  posi- 
tion by  close  reasoning  and  by  appealing  to  the  results  of  eight 
years  experience,  and  we  proclaim  our  conviction  that  the  judg- 
ment of  the  country,  and  of  men  of  scientific  culture  on  this  ques- 
tion, 13  m  favor  of  the  national  currency. 

Mr.  Chase's  Want  of  Consistency.  * 

We  cannot  close  our  remarks  on  the  origin  of  our  national  cur- 
rency without  directing  attention  to  the   circumstance  of   the 


f 


ilf'^tW.ti  ir  In- 


28 

Secretary  of  the  Treasury  (Mr.  Chase)  "  recommending  "  a  financial 
policy  entirely  opposed  to  the  principles  he  so  clearly  demonstrated 
as  being  sound  and  correct.  That  which  ho  proved  to  be  best  by 
unanswerable  arguments  he  faintly  "suggested,"  whilst  the  scheme 
he  recommended  was  exactly  that  which  he  overthrew  by  the  most 
powerful  of  reasons.  We  suppose  this  apparent  inconsistency  of 
the  becretary  must  be  set  down  to  the  account  of  the  strong  op- 
posing influences  of  the  committee  of  bankers  he  had  summoned  to 
his  aid.  Had  he  studied  the  history  of  British  finance  he  would 
most  likely  have  discovered  that  such  counselors  always  have  a 
strong  penchant  for  getting  into  the  public  purse-a  liking  for 
loans  from  the  nation  to  themselves,  "  without  interest." 

-  ,.  »  , ,    ,        Prospect  of  Resumption.  ^t 

We  have  expressed  profound  regrfit  that  a  determined  eflforthad 
not  been  made  by  Congress  when  the  $150,000,000  currency  bill 
was  passed  to  get  back  to  a  specie  basis.  Had  Congress  possessed 
the  knowledge  now  acquired  of  the  abilitv  of  the  government  to 
control  the  gold  market,  there  can  hardly  be  a  doubt  that  the 
attempt  we  refer  to  would  have  been  made.  Had  it  been  made, 
and  followed  up  by  the  vigorous  financial  policv  of  President 
Grant,  its  success  could  not  have  been  doubtful.  But  this  knowl- 
edge was  slow  of  attainment.  Indeed,  its  full  force  only  became 
apparent  on  the  24th  of  September  last,  when  Mr.  Boutwell  sent 
his  memorable  order  to  New  York,  "  Sell  four  millions  of  gold." 

But  it  is  aside  from  the  object  of  these  articles  to  criticise  the 
policy  that  led  to  the  issue  of  so  large  an  amount  as  $400,000,000 
of  national  and  over  $150,000,000  of  bank  currency,  in  addition 
to  the  $150,000,(100  required  to  take  the  place  of  the  then  out- 
standing State  banks'  currency.  We  have  considered  things  as  we 
have  them,  looking  for  a  time  not  very  far  distant,  when,  by  the 
laws  of  money,  our  currency,  national  and  bank,  will  be  appre- 
ciated to  a  par  with  specie  by  the  increase  in  our  industry  and 
commerce.  Those  who  have  formed  their  opinions  on  the  question 
of  the  amount  needed  to  circulate  our  commodities  on  the  ante-war 
standard,  are  ignorant  of  the  principles  of  currency.  Two  years 
ago  the  writer  expressed  his  reaso'.?,  lurough  leading  journals,  for 
believing  that  the  extraordinary  development  in  all  branches  of  in- 


1 


ling  "  a  financial 
rly  demonstrated 
d  to  be  best  by 
'hilst  the  Bchcme 
rew  by  the  most 
inconsistency  of 
)f  the  strong  op- 
ad  summoned  to 
finance  he  would 
I  always  have  a 
30 — a  liking  for 
•est." 


mined  eifort  had 
)0  currency  bill 
tigress  possessed 
I  government  to 
doubt  that  the 
id  it  been  made, 
y  of  President 
But  this  knowl- 
ce  only  became 
.  Boutwell  sent 
ions  of  gold." 
to  criticise  tho 
as  $400,000,000 
icy,  in  addition 
f  the  then  out- 
ed  things  as  we 
it,  when,  by  the 
will  be  appre- 
r  industry  and 
on  the  question 
)n  the  ante-war 
!y.    Two  years 
ig  journals,  for 
branches  of  in- 


29 

duBtry  and  wealtk,  would  cause  our  too  large  volume  of  currency 
to  steadily  appreciate  towards  a  specie  value.  When  Congress 
met,  in  December,  1868,  Senator  Morton  and  many  other  members 
of  both  houses  made  elaborate  speeches  to  demonstrate  that  no 
such  phenomena  would  ever  present  itself.  Mr.  Morton  declared 
that  an  irredeemable  paper  currency  would  never  appreciate  to 
par  without  contraction,  unless  the  government  borrowed  a  fab- 
ulous amount  of  gold  and  solemnly  fixed  a  day  when  it  would 
resume.  Another  class  of  philosophers  took  issue  on  these  and 
other  equally  crude  notions  by  declaring  that  "  the  way  to  resume 
was  to  resume."  That  is,  tho  government  was  to  sell  all  its  gold 
at  par,  when  the  laws  of  nature  had  fixed  its  market  value  at  about 
133. 

What  the  government  should  then  have  done  was  to  have  oflfered 
gold  to  all  comers  at  its  market  value,  which  might,  for  the  pur- 
pose,  have  been  determined  on  monthly  or  quarterly  averages. 
This  would  have  stopped  the  injurious  fluctuations  caused  by  tho 
gold  gamblers.  There  would  then  have  been  no  necessity  for  the 
government's  coming  to  the  relief  of  the  bears  on  the  notable  24th 
of  September.  But  the  event  of  that  day  has  been  of  great  value 
to  the  country  and  to  the  science  of  money.  It  has  shown  how 
completely  the  government  is  master  of  the  situation,  and  demon- 
strated what  the  writer  was  among  the  first  to  contend  for,  namely 
that  the  currency  would  in  a  few  years  come  to  par  without  tho 
distressing  ordeal  of  contraction.  He  then  claimed  that  all  that 
was  needed  was  to  let  it  alone,  and  "  hedge  "  against  the  conspira- 
cies of  the  "bulls"  and  the  "bears."  The  distinction  between 
selling  gold  at  the  value  fixed  oy  the  law  of  supply  and  demand 
and  selling  it  at  par,  must  bo  obvious  to  every  one.  Under  such  a 
policy  the  government  would  never  have  been  called  on  to  sell  of 
its  steadily  increasing  supply,  as  the  price  in  the  open  market  would 
always  have  been  a  fraction  lower,  as  it  was  in  England  during 
the  bank  suspension. 

Though  gold  has  fallen  to  113,  or  twenty  per  cent,  since  the 
autumn  of  1868,  when  Senator  Morton  declared  the  currency  would 
iusver  appreciate  to  par,  the  Treasury  has  taken  no  steps  to  steady 
Its  price  and  pv<>rmit  the  paper  money  to  be  raised  by  easy  stages 
to  a  specie  value.    If  it  should  now  be  carried  to  par  by  a  panic 


f"' 


! 


30 


it  would  be  difficult  to  roflumc,  because  the  very  att  would  suddenly 
inflate  the  volume  of  poper  money  $44,000,000— the  amount  of  gold 
certificates  afloat,  which  would  at  once  circulate  as  currency.  If 
such  an  event  as  we  refer  to  should  happen,  the  only  way  for  gov- 
ernment to  resume  and  maintain  specie  payments,  would  be  to 
fund  the  gold  certificates  promptly  and  suppress  the  fractional  cur- 
rency.  The  latter  would  be  no  longer  needed,  as  all  our  silver 
would  at  once  come  out,  even  before  par  was  reached,  as  well  as 
gold  dollars.  Mr.  Hincks,  the  remarkable  Canadian  financier, 
who  has  ordered  that  our  silver  shall  be  current  in  the  Dominion 
at  20  discount,  will  have  his  anxieties  set  at  rest.  It  will  come 
back  in  far  less  time  than  it  took  to  find  its  way  there,  and  leave 
our  neighbors  in  distress  for  want  of  change. 

It  is  not  desirable  that  the  government  should  force  on  specie 
payments  too  rapidly.  But  better  that  than  the  passage  of  any  of 
the  measures  now  before  Congress  for  funding  the  debt  in  the  inter- 
est of  the  national  banks  or  for  inflating  the  currency.  From 
these  and  all  other  such  crude  and  premature  measures,  the  nation 
may  pray,  "  Good  Lord,  deliver  us !"  The  time  for  passing  a  fund- 
ing bill  has  not  arrived,  and  the  currency  will  take  care  of  itself 
if  Secretary  Boutwell  does  not  throw  away  too  much  of  his  ammu- 
nition in  skirmishing  with  the  gold  gamblers.  Let  him  ask  for 
and  obtain  power  to  sell  gold  to  all  comers  at  the  market  value, 
which  an  average  of  the  last  month  would  fix  somewhere  between 
its  present  price  of  113  and  120.  This  would  at  once  relieve  the 
country  from  all  anxiety  about  combinations  to  raise  the  market, 
and  the  gold-room  would  soon  become  a  very  tame  place.  The 
recent  heavy  fall  in  gold  is  due  to  two  causes :  First,  the  rapid  ap- 
preciation of  the  public  credit,  caused  by  the  excellent  administra- 
tion of  the  national  finances  by  President  Grant  and  Secretary 
Boutwell ;  and,  secondly,  to  the  death  blow  dealt  to  that  most  un- 
scrupulous clique,  of  which  Gould  and  Fisk  were  the  head  and 
front,  by  the  order  to  "  sell  four  millions  "  on  the  24th  September. 
But  little  of  the  phenomena  can  be  charged  to  the  account  of  the 
natural  law  of  supply  and  demand. 

The  popular  view  of  this  question,  as  between  the  national  cur- 
rency and  the  bank  currency,  as  is  often  the  case,  coincides  with 
the  strict  deductions  of  science  and  with  the  clear  teachings  of 


1 


t  would  suddenly 
e  amount  of  gold 
08  currency.  If 
nly  way  for  gov- 
its,  would  be  to 
le  fractional  cur- 
8  all  our  silver 
ftchcd,  as  well  as 
ladian  financier, 
in  the  Dominion 
it.  It  will  come 
there,  and  leave 

I  force  on  specie 
assagc  of  any  of 
Icbt  in  the  inter- 
urrency.    From 
ures,  the  nation 
r  passing  a  fund- 
CO  care  of  itself 
;h  of  his  ammn- 
-.et  him  ask  for 
e  market  value, 
swhere  between 
mce  relieve  the 
ise  the  market, 
me  place.    The 
t,  the  rapid  ap- 
lent  administra- 

and  Secretary 
)  that  most  un- 

the  head  and 
1th  September, 
account  of  the 


31 

history.  Let  the  President  and  his  earnest  Finance  Minister  devote 
themselves  to  tiic  public  interest,  and  the  nation  will  certainly  sus- 
tain their  policy  in  opposition  to  that  thus  far  developed  by  Con- 
gress in  favor  of  the  monopoly  of  capital.  If  the  matter  cannot 
be  otherwise  settled  at  present,  let  there  bo  a  truce,  and  let  the 
two  kinds  of  currency  continue  to  circulate  until  the  finances  admit 
of  buying  up  the  bank  circulation,  dollar  for  dollar,  and  thus  for- 
ever set  at  rest  a  matter  of  the  highest  importance  to  the  nation. 
A  sound  and  uniform  currency,  under  able  and  experienced  man- 
agement, will  do  more  to  add  stability  to  our  institutions  and  pro- 
mote the  interests  of  labor  than  any  other  consideration  or  measure 
now  engaging  the  attention  of  Congress.  If  all  legislation  on 
financial  matters  can  be  postponed,  even  for  a  single  year,  members 
will  be  better  informed,  and  will  come  back  to  the  consideration 
of  the  various  subjects  better  qualified  to  deal  with  them. 

In  conclusion,  we  venture  to  predict,  that  if  Congress  will  only 
permit  the  President  and  his  able  Secretary  of  the  Treasury  to 
pursue  the  policy  they  have  adopted  for  strengthening  the  public 
credit,  for  two  years  longer,  a  bill  may  then  be  passed  to  fund  all 
the  interest-bearing  debt  in  one  class  of  bonds,  or  national  stock, 
bearing  not  to  exceed  four  per  cent,  interest. 

The  income  tax,  in  some  modified  form,  should  be  renewed.  It 
is  the  most  equitable  method  of  raising  revenue  that  can  be  devised, 
and  it  is  the  mo',t  popvlar,  nohvithstandiny  the  cry  raised  by  certain 
journals  in  the  interest  of  the  rich,  who  ought  to  contribute,  out  of 
the  accumulations  of  labor,  too  often  seized  by  grasping  avarice 
from  the  sons  and  daughters  of  toil.  Being  both  just  and  popular, 
let  this  tax  be  renewed— at  any  rate  until  all  our  debt  can  be 
funded  at  four  per  cent. 


e  national  cur- 
coincides  with 
r  teachings  of 


BBjwwwwawimw 


/ 


9' 


y 


W 


